R.B. 99-07
July 1999
GLOBAL COMPETITIVENE,SS OF
NORTHEASTERN
FOOD FIRM"S:
EXPERIENCE AND INTEREST IN FOREIGN
ACTIVITY
By:
.JAMES M. HAGEN AND CARLOS A.
SANTOS
l
/'
Department of Agriculture, Resource and .Managerial Economics
College of Agriculture and Life Sciences Cornell University Ithaca,
NY 14853-7801
J
It is the policy of Cornell University actively to support equality of
educational and employment opportunity, No person shall be
denied admission to any educat[onal program or activity or be
denied emplQymeni on th~ basis of any legally prohibited
discrimination
involving, but riot fimited to, such factors as race, color, creed,
religion, national or ethnic origin, sex, age or handicap. The
University is committed to the maintenance of affirmative action
programs which will assure the continuation of such equality of
opportunity.
11l
PREFACE
The authors of this Research Bulletin are Dr. James M. Hagen, Assistant Professor
and Carlos A. Santos, Master's Degree Candidate, Department of Agricultur(\l, Resource
and Managerial Economics, Cornell University.
As part of a larger project regarding the assessment of the Central New York region
for food industry growth, the Metropolitan Development Association of Syracuse &
Central New York provided part of the support for this study. We are also grateful for
Hatch project funding through the Cornell University Agricultural Experiment Station. The
authors would like to acknowledge the participation in this larger project of Cornell
Professors Bruce Anderson and Gerald White, and graduate research assistant Charmaine
Ing.
Mr. William Kimball, Deve)opment Administrator of Agricultural Business of the
Department of Agriculture and Markets of the State of New York and Mr. Peter C.
Witmer, Chief of the Domestic and International Trade Division of the Pennsylvania
Department of Agriculture, provided valuable guidance in the identification and selection
of the surveyed food firms. The authors would like to thank Professors Deborah Streeter,
Gerald White and Bruce Anderson for their helpful comments on an earlier draft of this
bulletin.
Requests for additional copies of this bulletin may be addressed to:
Sharon Wyllie
ARME Department
Cornell University
14 7 Warren Hall
Ithaca, NY 14853
(607) 255-1622
Email: srw2@cornell.edu
iv
ABSTRACT
The objective of this study was to gain a better understanding of the characteristics
of small to medium sized food firms in the Northeast (New York and Pennsylvania) that
influence their decision to be involved or interested in foreign markets. The study involved
the use of a survey, and we used a series of logistic regression models as well as
correlation and cross-tabulations.
Of the 116 food-manufacturing firms of New York and Pennsylvania that we
successfully contacted in the survey, 55 are involved in foreign activity or were in the past,
and 73 firms were interested in starting or expanding their foreign activity. We grouped the
determinants that influence a firm's decision to enter or be interested in entering foreign
markets ~n seven categories: size, product type, diversification/specialization, marketing
knowledge advantage, R&D intensity, seller concentration and competitive nature of the
firm. The results indicated that the characteristics found in firms that have experience in
foreign activity are large size, high diversification, less marketing knowledge, high R&D
intensity, low local competition and high domestic competition. The characteristics
associated with an interest in starting or expanding foreign activity were the type of
product (perishable), high amount of own brands, high R&D expenses as a percentage of
total sales, low local competition, and a high percent of domestic and foreign competition.
Size was not significantly associated with any entry mode. Canada, Mexico, Europe, South
America and Asia were the preferred foreign markets entered. Firms with experience in foreign
markets were associated with an interest in direct exports. Firms producing non-perishable
products tended to be more interested in establishing warehouses abroad. Small and more
specialized firms tended to be more interested in copacking and licensing as entry modes. Europe
was the market most firms were interested in entering, for every entry mode.
Firms without experience in foreign activity described lack of information as a
barrier to enter foreign markets. Firms with experience in foreign markets considered price
competition, tariff barriers and other government regulations as obstacles to enter foreign
markets. Lack of time was perceived as a barrier by firms that were specialized and had
interest in foreign activity. Tariff barriers were a concern for firms that were large and
diversified. Firms with no experience in foreign activity perceived their small size as a
barrier. Almost all firms believed that their size is too small before entering foreign
markets. When firms actually decide to go abroad, they realize that size is not that
important. Firms that feel threatened by foreign competition tended to have experience or
interest in foreign activity.
...
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I
T ABLE OF CONTENTS
1. INTRODUCTION ............................................................................................................1
2. INTERN A TI ON AL MARKETING THEO RIES ...................................................................................1
3. FIRM CHARACTERISTICS THAT INFLUENCE THE FOREIGN MARKET ENTRY
DE CISlO N .................................................................................................................................................... 2
3.1. FIRM SIZE........................................................................................................................................... 3
3.2. TYPE OF PRODUCT OFFERED BY THE FIRM.............................................................................. 4
3.3. DIVERSIFICA TION/sPECIALIZA TION ......................................................................................... 4
3.4. MARKETING KNOWLEDGE............................................................................................................ 5
3.5. RESEARCH AND DEVELOPMENT (R&D) INTENSITY ............................................................... 6
3.6. SELLER CONCENTRATION............................................................................................................. 6
3.7. COMPETITIVE ENVIRONMENT. ........................................................ ... ... ... .................... ........... 6
4. HYPOTHESES D EVELO PMENT ........................................................................................................... 7
5. METH 0 DO LOG Y..................................................................................................................................1 0
5.1. SAMPLE SELECTION AND QUESTIONNAIRE DEVELOPMENT................................................................11
5.2. METHOD OF ANALYSIS...................................................................................................................................13
5.3. VARIABLE SELECTION .......................' ........................................................................................................14
6. RES UL TS............................................................................................................................................... .16
6.1. SAMPLE ANALYSIS ......................................................................................................................................... 16
6.2. GEOGRAPHICAL DISTRIBUTION OF FOREIGN ACTIVITY INVOLVEMENT OR INTEREST. ............. 18
6.3. EMPIRICAL ANALYSIS OF EXPERIENCE IN FOREIGN ACTIVITY: HYPOTHESES TESTING............. 20
6.4. EMPIRICAL ANAL YSIS OF INTEREST IN FOREIGN ACTIVITY: HYPOTHESES TESTING ................. 24
6.5. ENTRY MODE INVOLVEMENT ANALYSIS ................................................................................................. 26
6.6. ENTRY MODE INTEREST RESULTS.............................................................................................................. 27
6.7. PERCEIVED BARRIERS TOWARDS INCREASING INTERNATIONAL SALES........................................ 28
6.8. PERCEIVED IMPORTANCE OF GLOBAL COMPETITION .......................................................................... 29
7. D ISCUSSI 0 N ..........................................................................................................................................31
8. CON CL USI 0 NS............................................................................................ ........................................34
AP PEND ICE S ............................................................................................................................................3 7
APPENDIX 1. THE SURVEY INSTRUMENT FOR NEW YORK AND PENNSYL V ANIA .................38
APPENDIX 2. COVER LETTER FOR NY FIRMS CO NT ACTED BY TELEPHONE AND
WILLING TO P ARTICIP ATE IN THE SURVEY..........................................................46
APPENDIX 3. COVER LETTER FOR NY FIRMS NOT CONTACTED BY TELEPHONE ....................47
APPENDIX 4. COVER LETTER SENT TO NEW YORK AND PENNSYLVANIA................................. 48
APPENDIX 5. FIRST FOLLOW-UP (POSTCARD) TO NY AND PA FIRMS.......................................... 49
APPENDIX 6. THANK YOU POST CARD SENT TO NY AND PA FIRMS............................................ 49
APPENDIX 7. SECOND FOLLOW-UP LETTER SENT TO NY AND PA ............................................... 50
APPENDIX 8. THIRD FOLLOW-UP LETTER SENT TO NY AND P A FIRMS..................................... 51
VI
APPENDIX 9. CORRELATION TABLE FOR FIRM CHARACTERISTICS ............................................52
APPENDIX 10. CORRELATIONS TABLE: ENTRY MODE AND FIRM CHARACTERISTICS. 54
APPENDIX 11. CORRELATION TABLE FOR FOREIGN ACTIVITY INTEREST
AND FIRM CHARACTERISTI CS................................................................................. 55
APPENDIX 12. CORRELATION TABLE: BARRIERS AND FIRM CHARACTERISTICS.................... 56
APPENDIX 13. CORRELATION TABLE: THREATS AND FIRM CHARACTERISTICS ..................... 56
'p
APPENDIX 14. CORRELATIONS NEED FOREIGN ACT. AND FIRM CHARACTERISTICS. .58
APPENDIX 15. CORRELATIONS FOR NEEDS OF FOR. ACT., BARRIERS AND THREATS...59
APPENDIX 16. PARAMETER DESClUPTION FOR THE CATEGORICAL VARIABLES
USED IN THE LOGISTIC REGRESSION MODELS ..................................................... 60
APPENDIX 17. CROSS-TABULA nON TABLES...................................................................................... 61
1. FIRM CHARACTERISTICS... ............................................................................................................. 61
2. FOREIGN ACTIVITY EXPERIENCE................................................................................................. 63
3. FOREIGN ACTIVITY INTEREST ...................................................................................................... 64
4. FOREIGN MARKET ENTRY MODES............................................................................................... 65
5. ENTRY MODES INTEREST ............................................................................................................... 68
6. FOREIGN MARKET ENTRY BARRIERS ......................................................................................... 73
7. PERCEIVED IMPORTANCE OF GLOBAL COMPETITION ........................................................... 77
RE FE RE N C ES ......................................................................................................................................... 83
LIST OF TABLES
Table 1. Summary of the response rate for each group surveyed ................................................... 13
Table 2. Companies surveyed classified by three digit SIC codes ................................................. 16
Table 3. Characteristics of the 116 firms included in the analysis.................................................. 17
Table 4. Logistic regression models: experience (1 - 4) and interest in foreign
acti vi ty (5 - 6)............................................................................................................... 21
Table 5. Logistic regression results for each Hypothesis................................................................ 22
LIST OF FIGURES
If'
Figure 1. Logistic regression model ............................................................................................... 14
Figure 2. Foreign activity experience regions divided by entry mode ........................................... 18
Figure 3. Foreign activity interest regions divided by entry mode................................................. 19
GLOBAL COMPETITIVENESS OF NORTHEASTERN FOOD FIRMS:
EXPERIENCE AND INTEREST IN FOREIGN ACTIVITY
1. INTRODUCTION
Food industry markets are becoming increasingly global and integrated (Henderson,
Handy and Neff, 1996). All over the world, countries are reducing the barriers imposed on
foreign trade, and many are entering the GATT treaty. This globalization of world markets is
presenting opportunities and challenges to American food firms, especially small and medium
sized firms, since larger companies have been international for a long time (Birch, 1996). Firms
facing more competition in their domestic markets will probably need to become more involved
in other areas, such as foreign markets, in order to stay competitive. Most of the research on
globalization of the US food-processing industry to date has focused on trade and foreign direct
investment by the large US food-processing firms (i.e. multinationals). The objective of this
study is to determine the characteristics of small to medium sized food firms in the Northeast
(New York and Pennsylvania) that influence their decision to be involved or interested in
foreign markets. The study also involved descriptive analysis of the barriers that affect smaller
firms' foreign market entry decisions as well as the regions they are involved and interested in
for further foreign activity.
We divided the paper in 8 chapters. After this introduction, the second chapter describes the
main international marketing theories and the third chapter reviews the literature on firm characteristics
that have been associated with foreign activity. The fourth chapter presents the hypotheses developed
from previous foreign activity research with the specific features presented for this study. The fifth
chapter explains the methodology adopted for this
paper. It describes the sample' selection and questionnaire development, the method of
analysis, the model and the variables. The sixth chapter presents the results obtained from the descriptive
and empirical analysis done on the sample. The seventh chapter discusses these results obtained and the
eighth and last chapter presents a summary of the study and its
conclusions. It identifies weaknesses in the methodology used, presents the implications of the findings
and suggests further research extensions and topics.
2. INTERNATIONAL MARKETING THEORIES
The eclectic and transaction cost explanations are the best-known approaches to explain
a firm's choice of entry mode into a foreign market. Andersen (1993) points out that both of
these explanations consider in a high degree the influence of the market and decisionmaker's
strategy, and that they are probably more relevant at the later stages of the internationalization
process.
2
Dunning's (1988) eclectic explanation suggests that the firm's decision to enter a
foreign market and the choice of entry mode depend on its specific ownership,
internalization and location advantages. In other words, a firm establishes foreign
production to match internal firm-specific advantages with location specific advantages.
West and Vaughan (1995), consider specific ownership advantages to be managerial
knowledge and product quality; location to be foreign demand and market structure; and
internalization to be the reduction of transaction costs and risk by internalizing the
functions of foreign activity. Hill, Hwang and Kim (1990) present an eclectic theory of the
choice of international entry mode that suggests that domestic and foreign environmental
variables affect the entry mode primarily through their influence on the appropriate level of
resource commitments.
Anderson and Gatignon (1986) considered the transactions costs point of view,
treating the choice of entry modes from the perspective of choosing the degree of vertical
integration of international business, ranging from contractual entry modes to full
integration. They suggest that the most efficient entry mode is a function of the tradeoff
between control and the cost of resource commitment. The more mature the product class,
the less control firms should demand over a foreign business opportunity. They believe that
in this case the gains and incentives for control are lower because it is relatively easy to
transfer mature products across national boundaries. Klein, Frazier and Roth (1990) found
that larger volumes of sales merit economies of scale in acquiring international marketing
resources and developing export management skills.
Transaction cost theory is ideal for evaluating the export agent strategy because it suggests
a cost-effective structure for conducting international operations (Hennart, 1982). Nevertheless, the
focus of this theory on only firm-specific assets in explaining the decision of firms to expand
abroad, ignoring strategic interactions between firms, makes it limited (Hennart and Park, 1994).
This theory only assumes that firms act by themselves, Dot reacting to competitors. Although
transaction cost theory has been widely used in studying international business (Shane, 1992, 1993;
Rugman & Verbeke, 1992; Hennart, 1988, 1990, 1991; Contractor, 1990), they fail to demonstrate
how the model applies to smaller entrepreneurial firms (Zackarakis, 1997).
3. FIRM CHARACTERISTICS THAT INFLUENCE THE FOREIGN MARKET
ENTRY DECISION
,.
The present study advances our understanding of global competitiveness by
addressing the characteristics that influence the involvement and interest of food firms in
foreign markets. It examines the differences between those firms that are involved and
interested in starting or expanding foreign activity and those that are not. Many studies
done in the past have focussed on high technology industries or used highly aggregated
data. As a lower technology industry, food processing challenges us to find the differences
between firms active or interested in foreign markets and those that are not.
3
Since other studies have been done in other areas of the United States, we feel the need to
test the theory in food firms of the northeastern portion of the US, specifically New York
and Pennsylvania.
Past research suggests that the choice of entry mode to foreign markets will depend
on the opportunity, the firm's resources, the type of product, and the product life cycle
(Rosson and Reid, 1987; Young, Hamill, Wheeler and Davies, 1989). Miesenbock (1988)
and Root (1994) grouped the factors affecting the entry mode decision into internal (firm
level) and external (macro variables). Firm size, organization and commitment to
exporting are the internal factors. The external factors are industry characteristics, the
business environment of the firm and host-country environment. The purpose of this study
is to determine which factors or firm characteristics are associated with the involvement or
interest of northeastern food firms in foreign activity. This paper proposes seven
characteristics that determine the firm's propensity to enter foreign markets. They are: firm
size, type of product, diversification/specialization, marketing knowledge, research and
development (R&D) intensity, seller concentration, and the competitive environment of
the firm.
3.1. Firm size
Van Hoorn (1979) and Roth (1992) identified important factors that distinguish the
strategic behavior of small firms from that of larger firms. Among these factors are limited
resources and capabilities, insufficiently developed administrative procedures and methods and
less formal centralized planning and control systems. Horst (1974) found that firm size had a
positive and significant effect on foreign production. As an explanation, he suggests that larger
firms perceive less risk in any potential foreign investment, are limited in domestic expansion by
US antitrust regulations, and have fewer small targets for domestic acquisition. Katsikeas, Deng
and W ortzel (1997) suggest that small firms may perceive a higher risk in entering foreign
markets because they devote proportionately more resource.s and greater efforts to enter export
markets than larger compames.
,.
Munro and Beamish (1981,) found that larger firms are more likely to attract attention
from the suppliers and distributors, making foreign activity a more promising effort. Connor
(1983) also discusses the possibility that size may be a proxy for a firm's ability to manage widely
dispersed enterprises. Bourgeois (1981) argued that since larger organizations tend to have unused
or underutilized resources, they can direct greater efforts to export activities in comparison to
smaller firms. Bonaccorsi (1992), also noting the larger resource base oflarger companies, argues
that these firn1s perceive lower levels of risk concerning overseas markets and operations.
Henderson, Voros and Hirschberg (1993) found that food and beverage-manufacturing firms'
extent of foreign production was also positively associated with large firm size. Henderson (1980)
proposed that with each doubling of a firm's accumulated export output, a potential 20-30% export
cost reduction per unit of production exists.
4
On the other hand, some studies have found either no relationship or a negative
relationship between size and export behavior or export success (Calof, 1993; Julien, Joyal,
Deshaies and Ramangalahy, 1997; Ringe, Graves and Hansen, 1987). Cavusgil, Bilkey and
Tesar (1979) and Cavusgil (1984) have found only a weak relationship between size and
the firm's commitment of resources towards international sales or production (Yaprak,
1985).
3.2. Type of product offered by the firm
The involvement or interest in foreign activity can differ among firms producing
different types of products. Access to distribution is also usually crucial, both because food
products are often perishable, and because food is a mass-consumption item. Hagen (1997)
suggests that producing perishable products with a very short shelf life may not have
favorable economical and te«hnical conditions to export, inducing firms to produce abroad
through ownership interests in order to enter foreign markets. For this study, we considered
a product perishable if it needed refiigeration for maintenance of quality and had very short
shelf life (i.e. meat products and frozen fruits, vegetables and other products). We
considered canned and bottled products, flours, sugars and candy, nuts, potato chips, and
different types of pasta as non-perishable goods.
.i
3.3. Diversification/specialization
Current literature present contrasting results, making it unclear as to whether firms
involved in foreign activity tend to be more diversified or specialized in the number of
products marketed. Horst (1974) noted that diversified firms tended to explore foreign
markets more actively than specialized firms do. He argues that through domestic
diversification, firms learned how to run multinational operations. Handy and Henderson
(1992) also found this to apply to US food-manufacturing firms with foreign operations,
where they tend to be more diversified than those with home operations only. Firms with a
large portfolio of products may have an advantage for foreign production. Reed and Ning
(1996) explained that if a product originally intended for a new market was not successful,
the firm could easily put a substitute in the market. They also stated that the managerial
assets of a firm that are used for managing multiple products might also be useful for
managing those products in multiple regions.
On the other hand, Connor (1983) found that multinational firms with a higher
specialization are more likely to be involved in foreign activity. Stopford and Wells (1972)
indicated that there was a tradeoff between diversifying at home and engaging in foreign
activity. This could be especially true for small firms, since diversification could overly
stretch the resources of the firm. It is difficult to be diversified geographically as well as by
product because of the resulting excessive complexity and insufficient managerial time
(Hagen 1997).
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5
3.4. Marketing knowledge
Lyon and Durham (1994) found in a case study of a Michigan specialty fruit packer
that the development of direct export markets was most severely constrained by a lack of
managerial resources in the existing organizational structure. Previous research leads us to
group managerial knowledge, with respect to foreign activity, into two categories:
marketing knowledge and international experience.
Marketing knowledge is referred to as the introduction of a product into a new
market (Hennart, 1982), or the improvement of existing marketing methods (Buzzell and
Nourse, 1967).
Hennart (1982) argues that technology is of relatively common
knowledge in the food-processing industry, making marketing and other managerial
knowledge to be a major part ofthe finn's essential knowledge assets. He also suggests that
finns with a large percent of their sales coming from their own brands tend to have high
marketing' knowledge. Horst (1974) considers intellectual capital, in the fonn of marketing
knowledge, to be one major advantage of US food finns. He regards US finns as being
aware that advertising can be effective and economic. Reed and Ning (1996) found that
food-processing finns with higher ratios of advertising to sales also have a higher ratio of
foreign to domestic sales. Horst (1974) suggests two reasons for the association between
advertising and foreign production: (1) products that are advertised locally can also be
marketed abroad, and (2) finns in industries where advertising is intensive are more aware
of the value of using it. He also suggests that experience with product differentiation in the
domestic market is related with foreign production.
Other studies have found different marketing knowledge factors correlated with
export success (Yaprak, 1985). Among these factors are: Personal contacts with their
overseas distributor (Hunt, Froggatt and Hovell, 1967; Cunningham and Spiegel, 1971)
and smoother communications and sales effort (Czinkota and LaLonde, 1980). Cavusgil
and Kaynak (1983) also include factors such as: after sales service and company image,
extension of credits to foreign buyers, unique features of product offerings, and
motivations of foreign distributors through incentives. The impact of pricing strategy has
had contrary findings. Studies from Bilkey (1982, 1985) and Koh and Robicheaux (1988)
indicate that policies charging premium prices are associated with export success. Other
work indicates no significant association (Hirsch, 1971), or the opposite, that is export
success and competitive pricing and promotion are correlated (Kirpalani and MacIntosh,
1980). Bilkey (1982) also found a positive correlation between direct exports and export
profit experiences.
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I
Lyon (1995) found that a greater experience in international markets tends to
decrease the foreign market risk perceptions, as knowledge accumulates over time.
Gatignon and Anderson (1988) found that large US multinationals were more likely to use
integrated entry modes at higher levels of cumulative international experience.
Wiedersheim-Paul, Olson and Welch (1978), point out that in addition to the international
experience of the finn, the value system and the past history and experience of the
decision-maker himself are also important. This makes the personal characteristics and
experience of the decision-maker relevant in the export entry process. Kleinschmidt &
6
Cooper (1984) and Malette, Denis & Beliveau (1988) noted that firms prefer to export
through intermediaries, and then as they gain experience, move onto a direct export
strategy (Julien, Joyal, Deshaies and Ramangalahy, 1997). Katsikeas and Piercy (1993)
suggest that firms that exhibit greater levels of export involvement experience are likely to
be more capable not only of seeking, identifying, and responding to export market
opportunities, but of coping with foreign market expansion problems.
3.5. Research and development (R&D) intensity
Many studies have documented the strong positive impact of the firms' R&D
expenses (as a percent of total expenses or sales) on commercial success in global markets
(Kogut and Chang, 1991; Drake and Caves, 1992; Hennart and Park, 1994). This has also
been found to apply in the food industry, where multinational firms with higher R&D
expenses are also more active in foreign markets (Henderson, Handy and Neff, 1996).
3.6. Seller concentration
Handy' and Henderson (1991) described the US. food-processing industry as having
a high seller concentration relative to other industries: 4-firm ratio of 50 percent
or more and 8-firm ratio of 65 percent or more. The 4-firm ratio indicates the percent of
the firm's total production sold to their top four buyers, and the 8-firm ratio the percent sold
to their top eight buyers. These high ratios indicate that food firms tend to sell a large
volume of their total sales to a few customers, suggesting that the food industry may be
oligopolistic in nature (Hagen, 1997). Root (1994) hypothesized that firms in oligopolistic
industries tend to imitate the actions of domestic rivals that threaten to upset the
competitive equilibrium by gaining advantages through international markets. Another
possibility is that fewer buyers may induce a firm to a higher customer loyalty.
The firm may need to follow a customer overseas if they decide to expand in this manner.
Glesjer, Jacquemin and Petit (1980) found that a high degree of domestic
concentration negatively affects the share of exports in total industry sales, probably due to
a lack of competitive pricing and output decisions. Root (1994) also suggested that
companies in less concentrated industries would be more inclined to use low risk modes of
foreign entry, such as indirect exports.
3.7. Competitive environment
The relationship between domestic market conditions and the motivation to enter
foreign markets is an important factor for managers considering the appropriate entry mode
to use abroad. The size of the market has proven to be a determining factor for firms
deciding to engage in foreign activity. Wiedersheim-Paul, Olson and Welch (1978) suggest
that for the initial decision to start exporting it may be more relevant to analyze the
transition from a local market to a distant national market than from domestic to foreign
markets. They consider the extra-regional expansion process to be an important
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7
factor that "prepares" firms for exporting, due to the development of communication
networks and greater exposure to export stimuli.
Bilkey (1978), Pavord & Bogart (1975) and Liouville (1992) reported that
declining domestic market shares or saturated home markets might be strong motivators
for the initiation of export marketing activity. The incentive firms have to go abroad may
be caused by the exhaustion of local markets that in turn increases the local competitive
pressure on the firm (Horst, 1974). The growing number of merger activities in the foodprocessing industry may cause this limitation of local markets. On the other hand, if a
large percentage of their competition were local, firms would feel the need to focus in
strengthening their domestic market.
.
8:,
Root (1994) theorizes that a large domestic market allows firms to grow
significantly before venturing foreign markets, while firms with a small domestic market
may be attracted to exporting as a means of achieving economies of scale. A survey to
Belgium exporters 'performed by Glesjer, Jacquemin and Petit (1980) found that when
domestic sales increased, the ratio of exports to domestic turnover decreased. They
explained that firms with large domestic sales could achieve economies of scale without
incurring in the extra costs associated with exporting. On the other hand, Koh and
Robicheaux (1988) indicated that domestic price competition was not necessarily a
deterrent to direct export investments. They point out that although a firm's products may
not be considered unique in the domestic market, they can be perceived as such in the
export market and command premium export-prices. This gives them an insurance band of
profits when the dollar price fluctuates.
4. HYPOTHESES DEVELOPMENT
The hypotheses developed are based on the effect of the different firm
~
characteristics that influence the decision to enter foreign markets. The objective will
be to determine the profile of the firms that are involved in foreign markets and of the
firms that are interested in expanding into markets abroad. The first 12 hypotheses relate to
the influence of the firms' characteristics on their involv,ement in foreign activity, whereas
the last 12 hypotheses refer to the influence of these characteristics on their interest in
foreign markets.
.'
..
Since most larger firms have already evolved into multi-national corporations
(Sterns and Peterson, 1996), the study focused on small and medium sized firms in order
to better understand the early or mid stages of the internationalization process itself.
Larger firms perceive less risk when investing in any potential foreign market and are
limited in domestic expansion (Horst, 1974). One of the objectives of this study is to
identify if smaller companies are less likely to be involved (or interested) in foreign
activity, mainly exports. Following this argument, we hypothesize:
8
HI: Larger food firms are more involved in foreign activity than smaller firms.
}
The involvement or interest in foreign activity can qiffer between firms producing
different types of products. Firms producing perishable products, with a very short shelf
life may be reluctant to export, and firms producing non-perishable goods may be more
willing to export. Formally stated:
H2: Food firms producing non-perishable goods are more involved in foreign
activity.
US multinational firms tend to be more diversified than those with home operations
only (Handy and Henderson, 1992 and Reed and Ning, 1996). Firms with a large portfolio
of products may hav'e an advantage for foreign production. If the product that was
originally intended for a new market was not successful, a substitute could be easily taken
(Hagen, 1997). Based on this, we predict:
H3: Food firms that have a higher diversification are more involved in foreign
activity.
On the other hand, another study found that multinational firms with a higher
specialization are more likely to be involved in foreign activity (Connor, 1983).
Diversification could be disadvantageous for small firms as it could over-stretch \the
resources of the firm and cause excessive complexity and insufficient managerial time
(Hagen 1997). This leads to the formulation of an alternative hypothesis:
H4: Food firms that have a higher specialization are more involved in foreign activity.
Firms are involved in foreign investment only when they have some type of
advantage over the firms competing in the foreign market. One major advantage of US food firms
is their intellectual capital, in the form of marketing knowledge. Firms know that advertising can be
effective and economic (Horst, 1974). Past studies have found that food-processing firms with
higher ratios of advertising to sales have a higher percentage of foreign sales to domestic sales
(Reed and Ning, 1996). In addition, firms in which a large percent of their sales comes from own
labels are considered to have more marketing knowledge (Hennart, 1982). Based on this research
we hypothesize:
H5: Food firms with higher marketing expenses (as a percent of total sales) are
more involved in foreign activity.
H6: Food firms with a higher amount of own brands or a higher percentage of sales
from own labels are more involved in foreign activity.
Many studies have documented the strong positive impact of Research and
Development intensity, on commercial success in global markets (Kogut and Chang,
~.
,
9
1991; Drake and Caves, 1992; Hennart and Park, 1994). Henderson, Handy and Neff
(1996) also found this to apply in the food industry. Based on this, we predict:
H7: Food firms with higher R&D expenses are more involved in foreign activity.
A high percentage of US food industries have a high seller concentration (Handy
and Henderson, 1991). Thi~ indicates that food firms tend to sell a large volume of their
total sales to a few customers. This paper proposes that if a food firm has a larger customer
basis, it may be another form of intellectual capital, regarding marketing knowledge. On
the other hand, fewer customers may induce a firm to follow a customer overseas if they
decide to expand in this manner. Although the two arguments have conflicting conclusions,
we propose the following hypothesis:
H8: Food firms with a higher percentage of sales to the top four or eight buyers are
more involved in foreign activity.
If a large percentage of the competition smaller firms face were local, they would
feel the need to focus in £trengthening their domestic market.
H9: Food firms with a higher percentage of local competition are less involved in
foreign activity.
On the other hand, The incentive firms have to go abroad could be caused by the
exhaustion of local markets (Horst, 1974). As competition is more accentuated from
regions geographically further away, firm's may need to get involved in foreign markets in
order to expand.
HI0: Food firms with a higher percentage of their competition coming from the NE
region are more involved in foreign activity.
Hll: Food firms with a higher percentage of their competition coming from the
domestic US market are more involved in foreign activity.
Another assumption is that if a firm has a high level of competition coming from
abroad, they will become more involved in foreign markets in order to compete with these
firms in their markets also.
H12: Food firms with a higher percentage of their competition coming from
abroad are more involved in foreign activity.
\
rf
I
I
The hypotheses involving interest in foreign activity were considered separately
because interest in foreign markets may be more telling than experience in foreign activity,
since it has fewer limitations than to actually be involved in foreign markets. These
hypotheses are the same as the first 12 related to experience in foreign markets, with the
difference that they now relate only to the firms' interest in foreign activity.
10
H13: Larger food firms are more interested in starting or expanding foreign
activity.
H14: Food firms producing non-perishable products are more interested in foreign
activity.
HIS: Food firms that have a higher diversification are more interested in foreign
activity.
,I_
H16: Food firms that have a higher specialization are more interested in foreign
activity.
HI?: Food firms with hig,her marketing expenses are more interested in foreign
activity.
H18: Food firms with a higher amount of own brands or a higher percentage of
sales from own labels are more interested in foreign activity.
H19: Food firms with higher R&D expenses are more interested in foreign activity.
H20: Food firms with a higher percentage of sales to the top four or eight buyers
are more interested in foreign activity.
H21: Food firms with a higher percentage of local competition are less interested in
foreign activity.
H22: Food firms with a higher percentage of their competition coming from the NE
region are more interested in foreign activity.
H23: Food firms with a higher percentage of their competition coming from the
domestic US market are more interested in foreign activity.
H24: Food firms with a higher percentage of their competition coming from abroad
are more interested in foreign activity.
5. METHODOLOGY
The study involved the use of a survey to be used on small and mid-sized food
firms located in the northeastern portion of the United Sates, mainly New York and
Pennsylvania. The survey focussed on gathering information on the characteristics that
differentiate firms involved in foreign markets from the ones not involved, and of firms
interested in starting or expanding their foreign activity from the ones not interested in
I
11
starting or expanding in foreign markets. The survey was also designed to provide
information on the firms' barriers to enter foreign markets as well as their perception on
the challenges and opportunities presented by increasingly global markets.
5.1. Sample selection and questionnaire development
We constructed the list of surveyed firms from the following sources:
. New York State Department of Agriculture and Markets list of food-processing firms; .
Pennsylvania Department of Agriculture list of food-processing firms;
. New York State Association of Food-Processors mailing list; and,
. The 2010 Vision committee of the Metropolitan Development Association of
Syracuse.
!
1
,
.
.
I.
I
The list provided by the New York State Department of Agriculture and Markets
consisted of food and agribusiness firms that have expressed an interest in exporting by
participating in their department's activities. Since anyone company could be listed in
more than one different product category, we eliminated repeated firms, which left us with
484 different firms. In order to optimize the limited time and resource availability, we
targeted the sample towards food firms that are more likely to be involved or interested in
foreign activity. We did this in two steps. First, we eliminated the following product
categories out of the concern that many of the firms producing these products are targeting
specifically their local markets or that their products may be intended only for
consumption on the premises: fluid milk, bakery products and alcoholic and non-alcoholic
beverages. The following SIC product categories remained (Dun & Bradstreet Information
Resources, 1989): meat products; dairy products (except fluid milk); canned, frozen and
preserved fruits and vegetables and food specialties; grain mill products; sugar and
confectionery products; fats and oils; and, miscellaneous food preparations and kindred
products. Secondly, we selected only the firms that appear to produce or manufacture at
least one product of their own. We eliminated firms listed only as markets, farms,
importers, retailers or distributors. The final count of New York firn1s included in the mail
survey was 215.
The Pennsylvania Department of Agriculture provided a similar list of food and
agribusiness firms in Pennsylvania. This list included 472 firms that had expressed interest
in foreign activity by filling out an "Export Registration Form". Given his
familiarity with the database and the firms listed in it, the task of reducing the number of
firms in the same method as for the New York sample was left to Mr. Peter Witmer, Chief
of the Domestic and International Trade Division of the Pennsylvania Department of
Agriculture. The number of Pennsylvania food firms included in the survey was 158.
After an iterative process of drafting survey questions and designing a survey
format to address the research questions in the most concise way, a mail survey was ready
to be pre-tested. The objective of this pre-test was to assess the survey format and
questions. We selected three firms for the pretest. Two (one located in New York and one
in Pennsylvania) were contacts of Professor James Hagen and we selected randomly
12
the third firm from the list of 158 firms from Pennsylvania. Following the pretest, we
made the necessary changes to the survey and adjustments to the implementation of the
mail survey.
The "Total Design Method" (Dillman, '1978) was used as a guide to develop the
questionnaire and the procedure used. We sent each survey (Appendix 1) with a cover
letter (Appendix 2, 3 and 4) and a stamped self-addressed envelope. A week later, we sent
a post card (Appendix 5) as a reminder to each of the firms from which we had not
received an answer. Three weeks after we sent the first survey, we mailed a second follow
up to the firms that did not respond. This included a cover letter (Appendix 7), another
copy of the survey, and another stamped self addressed envelope. About two months after
we sent the first survey, we mailed the third and last follow up. This was the same as the
second, only that th~s time we sent it by certified mail and the cover letter was more
urging (Appendix 8). We sent a thank you post card to each of the respondents that
returned the survey (Appendix 6).
We then screened the 215 New York firms by telephone in order to eliminate the
ones that were no longer in business or at another address. We contacted by telephone 173
firms of the original list. We mailed a survey to the'23 firms that confirmed their
willingness to participate (NYY). We also mailed a survey to the 47 firms that we
contacted by telephone but could not reach in person (NYZ). Due to time constraint, we
did not screen the last 42 firms in the list and all of them were included in the study and
mailed a survey (NLL). This caused the response rate to be lower for this group because
we sent 11 surveys to a wrong address and one firm was out of business. Nevertheless, the
response rate (not considering wrong addresses and firms out of business) was similar for
all three groups (Table 1). Of a total (effective) number of surveys sent (246), 124
responded giving a response rate of 50.41 %. We added 42 companies interviewed in the
Central New York Area to these responses, giving us a total of 1§6 companies or cases.
The following criteria were used to select the final number of firms included in the study.
We only selected companies that process or manufacture at least one product of their own.
The firms not included in the original seven SIC categories were eliminated. Finally, we
eliminated the larger firms (with more than 500 million dollars in total sales). A final count
of 116 firms remained.
We did a final revision of the sample when analyzing the entry modes used by the
firms (section 6.3), the perceived barriers in entering foreign markets (section 6.6.) and the
perceived importance of global competition (section 6.7). Those surveys that had no
answers for the sections regarding past and current foreign activity, future foreign activity
and attitudes toward foreign activity were not included in this section of the analysis. This
left us with 110 firms in our sample for these variables analyzed.
13
Table 1. Summary of the response rate for each group surveyed
Group Surveys Surveys Response Database surv1
No
Final
sent
received
rate
error 1
23
14
60.9%
0
23
60.9%
1
8
11
NYZ
47
26
55.3%
2
45
57.8%
2
17
19
NYL
42
19
45.2%
12
30
63.3%
3
8
16
NYTOT
112
59
52.7%
14
98
60.2%
6
33
46
PA
158
65
41.1%
10
148
43.9%
8
75
51
Survey
270
124
45.93%
24
246
50.4%
14
108
97
42
42
100%
0
42
100%
0
0
19
312
166
53.2%
24
288
57.6%
14
108
116
NYY
.. -
Effective Refused
CNY
TOTAL
effec
response3 answer 4 reply 6 coune
Notes:
NYY: New York firms contacted by telephone and willing to participate in
the study
NYZ: New York firms contacted by telephone but not reached in
person
NYL: New York firms not contacted by telephone
P A: Pennsylvania firms included in the study
CNY: Central New York firms
interviewed
I Number of surveys returned because of wrong address or the firm was no longer in
business
2 Number of surveys sent, not considering surveys returned because of
database error
35.2.
Response
rateof
(percentage)
Method
analysis without considering
~ the surveys returned because database error
Number of surveys received without response because firms did not wish to disclose the information or
were not We suggested the following detenninants of finn internationalization: finn
4
interested in(size,
participating.
characteristics
product type, diversification, marketing knowledge, R&D expenses,
5 N umber of surveys not
and
seller
concentration)
and the competitive environment of the finn (local, regional,
returned
domestic
and
foreign
competition).
In order
to attempt
to quantify the relationship between
6 Final count of firms included in this study (excluding
chosen
SIC categories)
the independent variables (finn characteristics and competitive nature) and the dependent
variables (experience or interest in foreign' activity), we used cross-tabulations and the chisquare test statistic (SPSS Inc., 1993). The null hypotheses were that the suggested
detenninants of foreign activity are unrelated to experience or interest in globalization (i.e.,
the proportion of finns experienced/interested in foreign activity is the same regardless of
the size of the finn, etc.). A review of the cross-tabulations gives us some indication as to
what may be important to the internationalization process for at least the finns in this
sample population.
In order to predict a finn's involvement or interest in foreign activity, as well as
identifying the finn characteristics useful in making the prediction (impute causality) we
used regression analysis (Kennedy, 1993). When the dependent variable is qualitative and
dichotomous, a logistic regression model should be employed (Kennedy, 1993). In
14
this study, we attempted to model the food finn's experience and interest in foreign activity
as a way of testing the hypotheses stated earlier. We considered a finn to have.
experience in foreign activity if they are currently exporting or have done it in the past.
We considered a finn to be interested in foreign activity if they expressed an interest in
starting or expanding foreign activity, regardless of whether they had experience exporting
or not. The explanatory variables used in the assessment of the logistic models were
questions taken directly from the mail survey, regarding the finns' characteristics and
competitive environment. When using logistic regression, each categorical response needs
to be converted to sets of dichotomous zero-one variables, one less than the original
number of categories. The Beta coefficient (P) can be interpreted as the change in the
value of the ratio of the probability that a finn will have experience in foreign activity over
the probability that the finn will not have experience, caused by a change in the value of a
detenninant from zero to one (Hosmer and Lemeshow, 1989). The same applies for the
model of interest in foreign activity. Figure 1 displays the econometric model used for
logistic regression.
P (Yi = 1) = 1 / (l + e-z), whe~e
Yi = 1 if a firm has experience in foreign activity
in Models 1 to 4
Yi = 1 if a firm has interest in foreign activity in
Models 5 and 6
Xi = The vector of independent variables for
the firm characteristics
Figure 1. Logistic regression model
Source: Maddala, 1983.
We used descriptive statistics and cross-tabulations to analyze the entry modes
preferred by the surveyed food finns and to detennine the regions where they were more
involved or interested in. These methods were also used to describe the attitudes of the
surveyed food fimls regarding the barriers they perceived in entering foreign markets
(section 5.4.) and the importance of global competition (section 5.5.).
5.3. Variable selection
In order to classify the food finns by size, we used three attributes: Total sales
(TOTSALE), Total assets (TOT ASET) and Number of full-time employees (FULEMP).
Since there exists a highly significant positive correlation «0.001) between the variables
TOTSALE, TOT ASSET, and FULLEMP (Appendix 9), we used the variable TOTSALE
as a measure of firin size in the logistic regression analysis. We
15
classified the finns by size according to the amount of total sales reported (in millions of
dollars): less than 1, 1 to 9.9,10 to 99.9, and 100 to 499 million dollars in total sales.
In order to detennine the influence of the type of product the finn offers we used
the variable Type of product offered (TYPEPROD). We divided the finns into the ones
producing goods that have a very short shelf life and need refrigeration (perishable goods),
and the ones producing more stable products that do not need refrigeration (nonperishable
goods ). We considered a finn to produce a perishable product if it belonged to one of the
following SIC categories: meat packing plants (2011), sausages and other prepared meat
products (2013), poultry slaughtering and processing (2015), natural, processed and
imitation cheese (2022), ice cream and frozen desserts (2024), frozen fruits, fruit juices and
vegetables (2037), frozen specialties, not elsewhere classified (2038) and prepared fresh or
frozen fish and seafood (2092). We considered a finn to produce non-perishable goods if it
belonged to any of the following SIC categories: dry, condensed and evaporated dairy
products (2023), canned specialties (2032), canned fruits, vegetables, preserves, jams and
jellies (2033), dried and dehydrated fruits, vegetables and soup mixes (2034), pickled fruits
and vegetables, vegetable sauces and seasonings and salad dressings (2035), flour and
other grain mill products (2041), prepared flour mixes and dough (2045), prepared feeds
and feed ingredients for animals and fowls, except dogs and cats (2048), cane sugar,
except refining (2061), candy and other confectionery products (2064), chocolate and
cocoa products (2066), chewing gum (2067), salted and roasted nuts and seeds (2068),
shortening, table oils, margarine and other edible fats and oils (2079), roasted coffee
(2095), potato chips, com chips and similar snacks (2096), macaroni, spaghetti, vennicelli
and noodles (2098) and food preparations not elsewhere classified (2099).
The variable we used to test for diversification and specialization was Number of products
offered excluding size and color variations - (NUMPROD). According to the number of
products made, we divided the finns into the ones producing fewer than 10, from 10 to 99, and 100
or more products.
-
The variables we used to capture the finns' Marketing knowledge advantage were
marketing expenses as a percent of total sales (MARKET), Own labels as a percent of total
volume sales (OWNLABEL), and Number of brands offered excluding private labels (NUMBRAND). Regarding the number of brands, we divided the finns into the ones that
offer fewer than 10, and the ones that offer 10 or more brands.
In order to assess the impact of R&D intensity (Research and Development) on
foreign activity, we included a variable for R&D expense as a percent of total sales
(R&DEXP).
We used the variables percent of total production sold to Top four buyers
(4BUYER) and percent of total production sold to Top eight buyers (8BUYER) to capture
the influence of Seller concentration in the finns' foreign activity. Since there exists a
highly significant positive correlation «0.001) between the variables 4BUYER
I
16
and 8BUYER (Appendix 9), we used the variable 4BUYER as a measure of sales
concentration in the logistic regression analysis.
We used four variables to determine the effect of the competitive environment on
the firms' foreign activity experience and interest. The effect of Local competition was
captured by the variable LOCCOMP, which is the percent of competitors located in their
State of operation (New York and Pennsylvania). The Regional competition effect was
represented by the variable REGCOMP, which is the percent of competitors located in
Northeastern US, excluding their local state. Domestic competition was represented with
the variable DOMCOMP, which is the percent of competition located in the United States,
excluding the Northeast. Foreign competition was represented by the variable FORCOMP,
which is the percent of competitors located abroad.
6. RESULTS
6.1. Sample analysis
Of the 116 firms considered in the study, 38 had no interest in starting or
expanding foreign activity. Two firms are also not interested but have participated in
foreign activity in the past. Three firms are currently active in foreign activity but are not
interested in expanding it. The number of firms that are interested in starting foreign
activity is 23. There are 50 firms involved in foreign activity and interested in expanding
it. In brief, 55 firms have experience in foreign activity and 73 firms are interested in
starting or expanding foreign activity.
Table 2 displays the number of firms for each of the seven product categories. The
largest category was the canned, frozen and preserved fruits, vegetables and food
specialties (28% of the total firms). The smallest group, with only 2%, was for firms
producing fats and oils.
Table 2. Companies surveyed classified by three digit SIC codes
SIC INDUSTRY CODE
201 Meat products
202 Dairy products (except fluid milk)
203 Canned, frozen and preserved fruits and vegetables
204 Grain mill products
206 Sugar and confectionery products
207 Fats and oils
209 Miscellaneous food preparations and kindred products
TOTAL
Frequency
19
4
32
8
20
2
31
116
Percent
16 %
3.%
28%
7%
17 %
2%
27%
100%
17
Table 3 presents the summary of the characteristics used in the analysis of the 116
firms that were included in the study. The majority of the firms had between one and 100
million dollars in total sales, with the mean closer to the 1 to 10 million dollar range. The
average number of full-time employees was 156. Most of the firms (86%) were involved in
the production of non-perishable foods.
Table 3. Characteristics of the 116 firms included in the analysis
Variable
Total sales
(million $)
Tot. assets .
(million $)
Product type
Number of
Survey data
(1) Fewer
(2) 1-9.9
(3) 10-99.9
(4) 100- 500 =
than 1 = 28
=35
=36
14
(1) Fewer
(2) 1-9.9
(3) 10-99.9
(4) 100- 500 =
than 1 = 36
=35
=27
5
(1) Non-perishable = 86
(0) Perishable = 29
(1) Fewer
(3)100 or more =
than
1(2) 10-99=45
34
10 = 37
(1) Fewer than 10 = 92
(2)10 or more = 21
I
products
Number of
brands
Label
Own labels =77.91 %
ownership
Competition
Local =
Regional =
distribution
35.16%
22.95%
Top 4 buyers (%)
Top 8 buyers (%)
R&D (% tot. sales)
Marketing (%total sales)
NOTES:
Full
time employees (Range = 1 to 1400)
I
*N = Number of firms answering the
question
",
I
1;
t;
N*
Mean
113
2.32
103
2.01
116
0.74
116
1.97
113
1.19
Private labels = 22.09 %
108
Domestic = Foreign =
85
I
31.32% 10.57%
97
93
87
93
113
35.45
50.92
2.49
7.99
156
The correlation tables (Appendix 9) and the cross-tabulation analysis (Appendix 17,
section 1), gave the following insights regarding the relationship among the characteristics
of the firms in the sample. Firms of less than 10 million dollars in total sales and less than
10 million dollars in total assets (smaller firms), tended to be located in the state of New
York, and the larger firms in the sample (10 million or more in total sales and more than 10
million dollars in total assets) were located more in Pennsylvania. Firms producing
perishable products tended to be of higher total sales and total assets
than firms that produce non-perishable goods. Firms producing a higher number of
products also had the tendency to have higher total sales and total assets. Firms producing
less than 10 products tended to be the ones that produce non-perishable products.
18
6.2. Geographical distribution of foreign activity involvement or interest.
The countries where the surveyed food finns had foreign activity experience were
grouped into eight commonly used regions: Canada (27 responses), Mexico (9), South
America and the Caribbean (10), Eastern / Central Europe (6), Western Europe (15), Asia
and the Pacific Rim (18), Africa and the Middle East (8) and Australia and New Zealand
(2). Figure 2 displays the regions as a percentage of the total responses for each entry
mode. The region of Canada was the most common for direct export and warehouses or
sales offices established abroad. Mexico is the most important in establishing ownership
interests. For indirect exports, the regions of S.A. and Caribbean, Eastern/Central and
Western Europe and Asia and the Pacific Rim were the most important. S.A. and Western
Europe were important for co-packing and licensing, while Mexico was only for copacking.
Figure 2. Foreign activity experience regions divided by entry mode
(Percentage of total answers)
50
45
40
35
30
25
20
15
10
5
0
A
B
C
o Canada
. S.A. and Caribbean
[] Western Europe
o Africa and Middle East
D
E
~ Mexico
Fa Eastern/Central Europe
~ Asia and Pacific Rim
~ Australia and New Zealand
NOTE:
A: Indirect export regions of experience (51 firms)
B: Direct export regions of experience (91 firms)
C: Warehouses and sales offices regions of experience (14 firms)
D: Ownership experience regions (8 firms)
E: Co-packing regions of experience (12 firms)
F: Licensing regions of experience ( 4 firms)
F
I
19
The countries where the surveyed food firms were most interested in entering were
grouped in the same eight regions as before, except that the region for Australia and New
Zealand is not included because no firm was interested in this market. Instead, a worldwide
region was included to represent when the respondent did not name a specific region or
country but answered "anywhere". Europe was overwhelmingly the market most firms
were interested in entering, in every entry mode category. Asia and the Pacific Rim was
another important region (Figure 3).
Figure 3. Foreign activity interest regions divided by entry mode
(Percentage of total answers)
A
B
o Canada
~ Eastern/Central
Europ'e o Africa and
NOTE:Middle East
C
Dl
D2
I1§l Mexico
Em Western Europe ~
Worldwide
A: Indirect export regions of interest (99 finns)
B: Direct export regions of interest (88 finns)
C: Warehouses and sales offices regions of interest (12 finns) D
I: Minority ownership regions of interest (16 finns)
D2: Majority ownership regions of interest (9 finns)
E: Co-packing regions of interest (51 finns)
F: Licensing regions of interest (22 finns)
E
F
8S.A. and Caribbean Fm
Asia and Pacific Rim
20
6.3. Empirical analysis of experience in foreign activity: hypotheses testing
We analyzed experience in foreign activity with four separate models (Table 4).
Model 1 explains the effect of total sales, product type, number of brands, own labels,
seller concentration, R&D intensity and marketing knowledge on the probability that a firm
has experience in foreign activity. Because of the high correlation of the variable
TOTSALE with NUMPROD, we included NUMPROD separately. Model 2 explains
experience in foreign activity dependent only on the diversification/specialization of the
firm. Model 3 captures the effect of local competition on the probability that a firm will
have experience in foreign activity, and Model 4 the effect of regional, domestic and
foreign competition on experience in foreign activity. We used these last two models
separately to avoid multicollinearity, since the sum of the last four variables is 100%. Table
4 displays the logistic regression models developed in the present study, together with the
overall performance and g~odness of fit of the models. Appendix 17 (sections 2)
displays the cross-tabulation tables used in the analysis. Table 5 presents a summary of the
results for each hypothesis analyzed. Appendix 16 indicates the relative frequencies for
Models I and 2, as well as their parameter coding.
6.3.1. Size
The cross-tabulation analysis shows that size is important. In this sample, larger
firms (measured by total sales) tend to be more involved in foreign activity than smaller
firms are. Model 1 shows that the coefficients for the variable TOTSALE are positive and
statistically significant for experience in foreign activity. This indicates that firms with
more than one million dollars in total sales (medium and large) are more likely to have
experience in foreign activity. These results support Hypothesis 1.
6.3.2. Industry type
The cross-tabs for the variable TYPEPROD did not test significant at the 0.1 level
for this sample. The coefficient for the variable TYPEPROD (non-perishable goods) was
not significant in Model 1. Since Hypothesis 2 could not be tested, this indicates that the
type of good a firm produces does not alter the firm's probability of being involved in
foreign activity.
6.3.3. Diversification / specialization
The cross-tabs indicated that diversification matters when deciding to enter foreign
markets. In the sample, firms that offered 10 or more products tend to have experience in
foreign activity. The logistic regression analysis corroborated this result. Model 2 shows
that the coefficients for the variable NUMPROD were positive and significant at the 0.05
level. This indicates that firms with higher diversification (more than 10 products) are
more likely to have experience in foreign activity, supporting Hypothesis 3 and not
supporting Hypothesis 4.
Table 4. Logistic regression models: experience (1
VARIABLE
TOTSALE
(2) 10-99.9
NUMBRAND
MODEL 3
SIO
0.0110**
0.4077
P
1.9111,
-4.7759
S.E.
0.9022
2.2283
SIO
0.0342**
0.0321 **
4.0976
4.8665
1.4650
47.6183
SIO
0.0052***
0.1824
0.6391
0.9186
-6.3684
3.0651
(I ):Nonperishable
(2): 10 or
MARKET
NUMPROD
(1): 10 to
99
p
S.E.
SIO
0.7753
0.0377**
p
-0.3213
3.9545
S.E.
0.7047
2.2093
SIO
0.6485
0.0735*
P
0.0134
0.0275
S.E.
0.0098
0.0189
S[O
0.1716
0.1455
P
-0.0108
0.0543
S.E.
0.0118
0.0341
SIO
0.3629
0.1105
P
0.3903
0.9264
S.E.
0.1449
0.4510
S[O
0.007[ ***
0.0400**
P
-0.0630
0.0374
S.E.
0.0357
0.0898
SIO
S[O
0.0779*
P
0.0336**
0.9937
0.6772
0.5928
-2.4684
S.E.
0.4676
2.4366
S[O
0.0336**
0.3110
(2): 100 or
p
1.2169
-1.6824
more
S.E.
0.5008
[.8333
SIO.
0.0151**
0.3588
P
S.E.
-0.0187
0.0072
SIO
0.0089***
P
-0.0210
0.0071
0.0031 ***
0.0090
0.0102
S.E.
SIO
CONSTANT
MODEL 6
2.1259
p
R&DEXP
FORCOMP
MODEL 5
1.1825
-I. 7600
S.E.
4BUYER
DOMCOMP
MODEL 4
21
499.9
OWNLABEL
REGCOMP
0.8965
- 4) and interest in foreign activity (5 - 6)
MODEL 2
(3) lOO-
more
LOCCOMP
S.E.
SIO
(I) 1-9.9
TYPEPROD
P
MODEL 1
0.0192
2.2804
0.0570
0.0390
0.3785
0.1438
S.E.
0.0259
0.0088
0.0756
0.0338
SIG
0.0033***
0.0254**
P
S.E.
0.0145
0.0112
0.1192
0.0531
SIG
0.1949
0.0247**
P
,
P
-2.9447
-0.8602
0.5671
-1.2496
-1.1397
1.2852
S.E.
1.4512
0.3597
0.3245
0.5374
2.4208
0.3618
0.0424**
74.7%/75
103.85
77.99
25.866
9
0.0168**
60.3%/1 16
160.50
153.29
7.214
2
0.0805*
63.5%/85
117.73
110.12
7.607
I
0.0201 **
62.4%/85
117.73
107.53
10.197
3
0.6378
81.1 %/53
66.51
34.18
32.327
14
0.0004***
64.7%/85
112.59
103.06
9.533
1
0.0021 ***
0.0271 **
0.0058***
0.0170**
0.0036***
0.0020***
Note: Beta Coefficient (Standard Error) Significance: *** = Probability level < 0.01; ** = Probability level < 0.05; * = Probability level < 0.1
SIO
Percent Correct / base
[nitial-2 Log Likelihood
Model -2 Log Likelihood
Model
Chi-square
Deg. Freedom
Significance
Table 5. Logistic regression results for each Hypothesis
Hypotheses
HI: Larger food finns are more involved in foreign activity than smaller finns ........................................ H2: Food
finns producing non-perishable goods are more involved in foreign activity.................................
H3: Food finns that have a higher diversification are more involved in foreign activity. . . . . .. . .. . . . . . . . . . . .. .
. . . . . . .. H4: Food finns that have a higher specialization are more involved in foreign activity. . .. . .. . . . . . . . . .
. . . . .. . .. . ... . .. H5: Food finns with higher marketing expenses (percentage of sales) are more involved in
foreign activity....... H6: Food finns with a higher amount of own brands or a higher percentage of sales from
own labels are more
Involved in foreign activity ................................... ........................... ......................................................... ....
H7: Food finns with higher R&D expenses are more involved in foreign activity...................................... H8:
Food finns with a higher percentage of sales to the top four buyers are more involved in foreign activity.....
H9: Food finns with a higher percent of local competition are less involved in foreign activity ........................... ..
HI0: Food finns with a higher percent of competition from the NE region are more involved in foreign activity...
HII: Food finns with a higher percent of competition from the US market are more involved in foreign activity...
H12: Food finns with a higher percent of competition from abroad are more involved in foreign activity............
H13: Larger food finns are more interested in starting or expanding foreign activity. .. .. .. .. .. .. .. .. ... ...... .. . ... ..
H14: Food finns producing non-perishable products are more interested in foreign activity............................. H15:
Food finns that have a higher diversification are more interested in foreign activity.............................. H16: Food
finns that have a higher specialization are more interested in forei~ activity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..
H17: Food finns .with higher
marketing
expenses are more interested in foreign activity............................. ... .......
. .
InterestedIn orelgn
fi . actIvIty................................................................................................
H18: Food
finns with a higher
amount of own brands or a higher percentage of sales from own labels are more
H19: Food finns with higher R&D expenses are mor~ interested in foreign activity.....................................
H20: Food finns with a higher percentage of sales to the top four buyers are more interested in foreign activity...
H2I: Food finns with a higher percent of local competition are less interested in foreign activity.....................
H22: Food finns with a higher percent of competition from the NE region are more interested in foreign activity..
H23: Food finns with a higher percent of competition from the US market are more interested in foreign activity..
Result
Supported
Inconclusive
Supported
Not
supported
Not
Inconclusive
supported
Supported
Inconclusive
Supported
Inconclusive
Supported
Inconclusive
Inconclusive
Not supported
Inconclusive
Inconclusive
Inconclusive
Supported
Supported
Inconclusive
Supported
Inconclusive
Supported
H24: Food finns with a hi!!her oercent of comoetition from abroad are more interested in forei!!n activit........................ Suooorted
N
N
23
T
6.3.4. Marketing knowledge
Although the cross-tabs did not give any significant results, Model 1 shows no
significant effect of the number of brands and the percentage of own labels offered
(Hypothesis 6 was inconclusive). Marketing expense as a percentage of total sales had a
negative coefficient, indicating that firms with higher marketing expenses are less likely
to have experience in foreign activity, not supporting Hypothesis 5. The percentage of
own labels produced by a firm does not influence their involvement abroad.
6.3.5. Research and development expense
We could not test the variable for R&D expense (as a percent of total sales) using
cross-tabulations, since it is a continuous variable. The coefficient for the variable
R&DEXP was positive and significant at the 0.01 level in ModelL This indicates that firms
with higher R&D expenses ("intellectual capital") are more likely to be involved in foreign
activity. These results support Hypothesis 7.
6.3.6. Seller concentration
We could not test the variable used to measure seller concentration using crosstabulations, since it is a continuous variable. The coefficient for the variable 4BUYER was
not significant at the 0.1 level in Model 1, so we could not test Hypothesis 8. This means
that the seller concentration does not influence the probability of a firm to be involved or
interested in foreign activity.
6.3.7. Local competition
The variables used to measure the competitive environment of the firm are
continuous, so they were not tested using cross-tabulations. In Model 3, the coefficient for
the variable LOCCOM had a negative sign and was significant at the 0.01 level. This
indicates that the higher the competition coming from local markets, the less likely the
firm is to be involved in foreign activity. These results support Hypothesis 9.
6.3.8. Regional competition
In Model 4, the percentage of competition coming from their own region (the
Northeast, without their own state) was non-significant, so Hypothesis 10 could not be
tested. This indicates that the competitive nature of their region does not affect the firms'
involvement in foreign markets.
6.3.9. Domestic competition
In Model 4 we can see that the variable for domestic (United States, excluding the NE)
competition had a statistically significant positive coefficient. This indicates that the higher the
competition coming from the domestic market, the more likely the firm is to be involved in foreign
activity. These results support Hypothesis 11.
24
6.3.10. Foreign competition
The variable measuring the finns' foreign competition was not significant in Model
4. Since we could not test Hypothesis 12, this detennined that foreign competition does not
influence the finns' involvement in foreign markets.
6.4. Empirical analysis of interest in foreign activity: hypotheses testing
We analyzed interest in foreign activity with two models. Model 5 incorporates all
the suggested detenninants of interest in foreign activity, both finn characteristics and
competitive environment of the finn, except local competition. We modeled this last
variable separately in order to, avoid multicollinearity, since the sum of all the competitive
variables is 100%. Table 4 displays the logistic regression models developed in the present
study, together with the overall perfonnance and goodness of fit of the models. Appendix
17 (sections) displays the cross-tabulation tables used in the analysis. Table 5 presents a
summary of the results for each hypothesis analyzed. Appendix 16 indicates the relative
frequencies for Model 5, as well as its parameter coding.
6.4.1. Size
The cross-tabulation analysis shows that size is important. In this sample, larger
finns (measured by total sales) tended to be more interested in starting or expanding
foreign activity than smaller finns are. With the logistic regression analysis, the results
were contradictory. The only statistically significant result was that finns of medium size
(from 10 to 99.9 million in total sales) were less likely to be interested in foreign markets
than finns with less than 1 million in sales were. Hypothesis 13 was inconclusive for the
rest of the coefficients. This may indicates that finn size does not influence the finn's
probability to be interested in foreign activity.
6.4.2. Industry type
The cross-tabs for the variable TYPEPROD did not test significant at the 0.1 level
for this sample.
The coefficient for the variable TYPEPROD was negative and
significant in Model 5. This result does not support Hypothesis 14, indicating that finns
producing non-perishable products were less interested in starting or expanding their
foreign activity.
6.4.3. Diversification / specialization
The cross-tabulation analysis was not significant. Hypotheses number 15 and 16
could not be tested since the coefficient for the variable NUMPROD was not significant at
the 0.1 level. This indicates that the diversification or specialization of a finn is not a factor
that affects the interest in starting or expanding foreign activity.
25
6.4.4. Marketing knowledge
The cross-tabs did not give any significant results for the finns in the sample. In
Model 5, only the coefficient for number of brands offered was positive and significant,
indicating that finns with a higher percentage of own labels produced were more likely to
be interested in foreign markets, supporting Hypothesis 18. We could not test Hypothesis
17, resulting that the percentage of marketing expenses as a percent of total sales did not
influence the finns' interest in starting or expanding their foreign activity.
6.4.5. Research and development expense
We could not test research and development expense (as a percent of total sales)
using cross-tabulations, since it is a continuous variable. The coefficient for the variable
R&DEXP was positive and significant at the 0.05 level in Model 5. This indicates that
finns with higher R&D expenses ("intellectual capital") are more likely to be interested in
foreign activity. These results support Hypothesis 19.
6.4.6. Seller concentration
We could not test the variable used to measure seller concentration using crosstabs, since it
is a continuous variable. The coefficient for the variable 4BUYER was not significant at the 0.1
level in Model 5, so we could not test Hypothesis 20. This means that the seller concentration does
not influence the probability a finn has to be interested in foreign activity.
6.4.7. Local competition
In Model 6, the coefficient for the variable LOCCOM had a negative sign and was
significant at the 0.01 level. This indicates that the higher the competition coming from
local markets, the less likely the finn is to be interested in foreign activity. These results
support Hypothesis 21.
6.4.8. Regional competition
In Model 5, the percentage of competition aoming from their own region (the
Northeast, without their own State) was non-significant, so Hypothesis 22 could not be
tested. This indicates that the competitive nature of their region does not affect the finns'
interest in foreign markets.
6.4.9. Domestic competition
In Model 5 we can see that the variable for domestic (United States, excluding the
NE) competition had a statistically significant positive coefficient. This indicates that the
higher the competition coming from the domestic market, the more likely the finn is to be
interested in foreign activity. These results support Hypothesis 23.
26
6.4.10. Foreign competition
The variable measuring the finns' foreign competition was positive and significant
in Model 5. This indicates that the higher the competition from abroad, the more the finns
became interested in starting or expanding their foreign activity. This result supports
Hypothesis 24.
6.5. Entry mode involvement analysis
A correlation (Appendix 10) and cross tabulation analysis (Appendix 17, section 4)
was used to detennine the characteristics that are associated with the entry modes chosen
by the 53 food finns participating in the study that are currently involved in foreign activity
or were involv~d in the past. A surprising result was that the characteristic for size (total
sales) was not associated in a statistically significant manner
with any entry mode. Nevertheless, it is interesting to note that only finns of more than 1
million dollars in total sales entered foreign markets with warehouses, ownership interests,
co-packing or licensing. Small finns of less than 1 million dollars in total sales only used
exporting as a way to enter foreign markets.
Exporting. No finn characteristic was associated with this entry mode. The only
relationship that existed was with foreign activity interest. Finns that were exporting are
also more interested in expanding their foreign activity. Finns that were exporting
intennittently tended to be smaller in size (total sales). When we controlled the intennittent
exports variable for seasonality of production, size was not related to intennittent exports.
Of the finns that have export experience, 58% had export sales as a
percentage of total sales of 5% or fewer and 90% had export sales of less than 20% of their
total sales.
Warehouses and sales offices established in foreign markets. Finns located in New York
tended to be more involved in warehouses abroad (27.6%, compared to only 7.7% in P A).
This may be caused by their closeness to Canada. Another related characteristic is number
of products. Finns with more than 10 products tended to also be more involved in foreign
activity.
Ownership interest in foreign manufacturing operations. Of the surveyed finns, all of those
who had ownership interests abroad were located in the state of New York.
Co-packing arrangements to manufacture a product abroad. The finns that were copacking
their products abroad were mainly from the state of New York (88%). The finn
characteristic associated with this entry mode was number of products. Finns producing
more than 10 products tended to be more active in co-packing abroad.
Production under license from a foreign firm. This entry mode was highly correlated with
the local competitive environment of the finns. Finns with higher competition from within
their own state tended to be more involved in licensing agreements abroad.
.
27
6.6. Entry mode interest results
Correlation (Appendix 11) and cross-tabulation analysis (Appendix 17, section 5),
at the 0.1 level of significance, gave the following results for interest in foreign activity:
Interest in indirect export. Finns located in Pennsylvania seemed to be more interested in
this type of entry mode than those from New York (62% of finns in PA were very
interested in this entry mode, whereas only 33% of NY finns were). The finn characteristic
associated with an interest in this entry mode was number of brands offered. Finns that
offered less than 10 brands tended to be interested in this particular entry mode. All the
finns that were interested in indirect exports were already involved in export activity.
Regarding the competitive environment, finns interested in indirect exports had a high
negative correlation with regional competition. Finns with higher regional competition
were less interested in indirect exports.
Interest in direct export. Finns located in Pennsylvania seemed to be more interested in this
type of entry mode than those from New York. Finns interested in this entry mode tended
to be those that had experience in foreign markets and all those interested are currently
involved in at least one type of exporting.
Interest in establishing warehouses or sales offices abroad. Finns producing nonperishable
products (86%) or already involved in warehouses abroad (67%) or copacking (60%)
activities tended to be very interested in this entry mode. Finns interested in this entry
mode were positively correlated with local competition. Finns with higher competition
coming from within their own state tended to be more interested in warehouses abroad.
Interest in minority ownership in foreign manufacturing operations. Finns interested in
minority ownership ventures abroad tended to have higher amounts of R&D expenses
(high correlation) and be already involved in warehouse activities. The majority (90%) of
the finns interested in this entry mode had experience in foreign acti vity.
Interest in majority ownership in foreign mapufacturing operations. Finns interested in
majority ownership tended to have a lower domestic (US) competitive pressure (negatively
correlated). The majority (89%) of the finns interested in majority ownership arrangements
abroad had experience in foreign markets. They also tended to be already involved in
warehouse activities (positive correlation).
.1
Interest in co-packing arrangements for foreign manufacturing. Finns interested in this
entry mode tended to be of smaller size (94% had less than 100 million dollars in total
sales), and be more specialized - produce a lower number of products (negative
correlation). Finns that were currently involved in warehouses or co-packing abroad tended
to be interested in this entry mode (positive correlation). Finns with experience in foreign
activity tended to be the most interested in this entry mode.
28
Interest in licensing agreements. The firms that were very interested in this entry mode
tended to be of smaller size (less than 10 million dollars in total sales), more specialized
and have a lower percentage of their production sold to their top four buyers. They also
tended to have a higher R&D expense as a percent of their total sales (positively
correlated).
6.7. Perceived barriers towards increasing international sales
The number of firms that answered a question regarding the major barriers that
their companies perceived in increasing their international sales was 106. Out of these
firms, 31 % answered lack of information, 29% lack of time, 39% price competition, 32%
tariff barriers, 25% other regulations by foreign governments (colorant restrictions,
declarations, labeling requirements, protectionist policies, phytosanitary issues, foreign
language labeling. Taxes, etc.), 3% inability to provide training or service, 32% company
size too small, 20% other barriers (product perishibility, transportation, financing,
communication, lack of dollar strength, promotion costs, religious barriers, payment
security, interest is strengthening domestic markets). The information that the firms
thought were lacking was in contacts, "know how", distribution, marketing strategy,
customer information, shipping instructions, labeling requirements, logistics and
regulations.
The correlation (Appendix 12) and cross-tabulation (Appendix 17, section 6)
analysis gave the following insights with regards to the perception of the firms' barriers to
enter foreign markets.
Firms that had no experience (64%), were interested in foreign activity (81 %), or
are currently not involved in co-packing agreements abroad (100%) perceived that lack of
information was a barrier to increasing the company's international sales. This variable also
had a positive significant correlation with the amount of product sold to their top four
buyers.
Firms producing less than 10 brands (94%), interested in foreign activity (79%) or
that source their products from abroad (55%) perceived lack of time as a barrier. This
barrier was also negatively correlated with the percentage of own labels produced by the
firms. It was also positively correlated with the amount of R&D expenses, marketing
expenses, and the percentage of competition coming from abroad.
Firms that produced perishable goods (67%) and had experience in foreign activity
(60%) tended to perceive that price competition was a barrier. This barrier was also
negatively correlated with the seller concentration variable. This indicaTes that firms that
sell to many more customers perceive this price competition as a barrier.
Tariff barriers were a major concern for larger firms (66% had mere than 10
million dollars in total sales), more diversified (81 % offered more than 10 products), had
experience (84%) and interest (78%) in foreign activity, or were regular exporters (67%).
L
29
This barrier also had a negative correlation with seller concentration and local (in-state)
competition, but a positive correlation with domestic (US) competition.
Larger firms (90% had more than 1 million in total sales) or had experience in
foreign activity (66%) tended to perceive other regulations by foreign governments as a
barrier. This barrier also had a negative correlation with local (in-state) competition, but a
positive correlation with domestic (US) competition.
Companies that produced perishable goods tended to perceive that the inability to
provide training or service was a barrier (67%). This barrier also had a positive significant
correlation with the amount of R&D expenses as a percentage of total sales, and their
current involvement in warehouses abroad.
The small size of the company was perceived as a barrier for firms that did not
have experience in foreign markets (70%) or that were not interested in starting or
expanding their foreign markets. This barrier was also negatively correlated with total
sales, number of products offered, and foreign competition. It was also positively
correlated with the firms' local competition. Despite that the size of the firm did not have a
statistically significant association with this barrier, firms that were smaller in total sales
perceived their small size as a barrier, but medium and large firms also thought they were
too small.
The other barriers mentioned above (product perishability, transportation, financing,
communication, lack of dollar strength, promotion costs, religious barriers, payment security,
interest is strengthening domestic markets) were more of a concern for firms that had experience in
foreign markets (65%), were currently exporting (80%), and not involved in ownership interests
(73%), co-packing (67%) or licensing agreements abroad (80%).
6.8. Perceived importance of global competition
..
l' .
Of the surveyed firms, 18 (19%) said that they felt threatened by foreign
competition in the US. When asked for a reason to explain this, 39% said that an increasing
number of foreign firms are taking away their business, 72% said that foreign firms have
lower overall costs of doing business, 17% that local firms who are active in foreign
markets are more competitive than they are, and 28% said other reasons. Among the other
reasons, the firms stated that local customers are getting accustomed to buying foreign
products, lack of US tariffs for entering products, lack of support towards local firms
because of New York State regulations and that the Canadian currency has an advantage.
Only 6% of the firms said that foreign firms have more advanced technoiogy,
Of our sample, 51 firms said that they feel the need to be (more) active in foreign
markets. When asked to explain this, 84% said because there are opportunities abroad that
they are not taking advantage of, 51 % because increasingly global markets will force them
to be active internationally, and 10% because of other reasons. Among the other reasons
given to be more active in foreign markets were the need for growth and that they
I
t
I
30
must follow customers which are entering foreign markets. Only 8% of the firms answered
that they need to be more involved in foreign markets because local firms who are active in
foreign markets are more competitive than the ones not active in foreign markets.
Of the surveyed firms, 43 expressed the need for strategic alliances (partnerships).
The main types of strategies listed as important were: with customers, financing
institutions, other food fimls, marketing agents, co-packing arrangements, sales agents,
distribution partners, brokers, suppliers, retailers, etc.). Another consideration is that 44 of
the surveyed firms source some of their raw materials from foreign firms or farms. These
materials were mainly vegetables, nuts, spices, sugar, grains, cocoa beans and chocolate,
meat, coffee beans and fruit juices.
Correlation (Appendices 13, 14 and 15) and cross-tabulation (Appendix 17, section 7)
analysis gave the following results:
Firms that thought that their company felt threatened by foreign competition in the
US tended to have experience (80%) or interest (85%) in foreign markets, or source some
raw materials from abroad (67%). This variable was also negatively correlated with their
local competition (in-State). Only the firm that produced perishable goods perceived that
foreign firms have more advanced technology. Firms that offered fewer than 10 brands
perceived that local firms who are active in foreign markets are more competitive than they
are (67%). This variable also had a positive correlation with the number of brands
produced, but a negative correlation with the percent of own labels produced. Firms that do
not source any raw materials from abroad perceived that other reasons (increase of local
demand for foreign products, lack of US tariffs for entering products, lack of support, etc.)
caused their company to feel threatened by foreign firms (80%).
Firms located in Pennsylvania (55%), produced non-perishable goods (69%), had
experience (61 %) and interest (90%) in foreign activity tended to perceive a need to be
(more) active in foreign markets. All firms that perceived this need were currently
exporting, but not involved in co-packing (93%) or licensing (100%). They also tended to
be the firms that perceive lack of information as a barrier (71 %), but not firm size (59%).
This need was also noted more in firms that feel threatened by foreign competition (68%),
and need strategic alliances (78%). The perceived need to be more active in foreign markets
also had a high positive correlation with the amount of R&D expenses as a percent of total
sales and with foreign competition. It had a negative correlation with local (in-state)
competition. All of the firms that felt that local firms who are active in foreign markets are
more competitive than they are source some of their raw materials from abroad. These
firms also perceived lack of information and lack of time, but not training inability as
barriers to enter foreign markets (75%), or perceived that they were threatened by foreign
competition (75%). This variable also had a positive
correlation with R&D expenses as a percent of total sales. Firms that perceived lack of
time (95%) but not high tariffs (93%) as barriers of entry into foreign markets tended to
believe that there are opportunities abroad that they are not taking advantage of. This
variable was also negatively correlated with total sales (smaller firms tended to perceive
31
more opportunities abroad). Firms of larger size (96% with more than 1 million dollars in
total sales), located in New York State (71 %), were regular exporters (79%), perceived
tariff barriers (68%) and other foreign regulations (71 %) as barriers of entry into foreign
markets, thought that they were being threatened by foreign competition (77%), and that
foreign firms were taking away their business (60%), tended to believe that increasingly
global markets will force them to be active internationally. This variable was also
positively correlated with domestic (US) competition. Only firms that had experience in
foreign activity perceived other reasons to be more active in foreign markets (need to
grow, financing, follow growing customers, etc.).
Firms that produced perishable products (60%), have interest in foreign activity
(51%); are currently exporting (52%), source some of their raw materials from abroad
(56%), or perceive lack of time as a barrier of entry into foreign markets (59%), perceived
a need for strategic alliances.
7. DISCUSSION
In this section, we will discuss the results obtained from the analysis of the
determinants that influence the decision of smaller food firms to enter foreign markets and
to be interested in global opportunities. We will also discuss the results from the firms'
choices of entry modes, perceived barriers and importance of foreign activity.
The empiri~al analysis performed on the sample indicated that larger firms tend to
be more involved in foreign activity. This is reasonable, since larger firms perceive less
risk when going abroad and are able to attract better deals with suppliers (Horst, 1974).
Although some past studies found that firms that are more specialized are more
likely to be involved in foreign activity (Connor, 1983), in the present study we found that
diversification is important for firms involved in foreign activity. These results support
those obtained by Horst (1974), and Reed and Ning (1994). Firms with more than 10
products reduce the risk of doing business abroad. The firm has variety from which to
choose from in order to determine their customer's preferences. We also need to take into
account the fact that the number of products a firm produces is highly correlated with the
size of the firm. This causes a difficulty when trying to determine which of these two
characteristics is the important determinant of foreign activity because we can not isolate
their effect. The number of brands a firm offers did not test significant in the model.
.j
.
I
rI
I
,j
t
,
I
I
When determining the marketing knowledge effect, the results did not support past
studies. Surprisingly, firms with lower marketing expense were more likely to have
experience in foreign activity. The negative effect of marketing expenses may be because
more firms may be delegating the marketing responsibility to their customers (Horst,
1974). We can also interpret the negative effect using Vernon's (1971) product
32
life cycle, considering that the advertisement intensity should decline as a product matures.
This would make the percentage of own labels a better proxy for marketing knowledge.
The intellectual capital of a firm, expressed as R&D intensity, was a positive and
significant determinant of foreign activity experience. Firms with higher R&D expenses
are usually more innovative in nature, and thus more tolerant to .the risk involved in
entering foreign markets.
The competitive environment of the firm proved to be an important determinant of
foreign activity experience. Firms with less local competition are more involved in foreign
activity. Firms with low competitive pressures in their local markets can divert energy and
resources to explore markets and opportunities abroad. On the other hand, firms that sell
primarily in their State may feel the need to expand their domestic market first, before
venturing in foreign markets, which are considered more involved and risky
than selling domestically.
Firms with a larger amount of domestic competition
(excluding the Northeast) are more involved in foreign activity than firms with low
domestic competition. It seems reasonable to believe that this may be caused by an
exhaustion of their domestic market, particularly if they are niche-market oriented.
The type of product a firm produces did not affect their involvement or experience
in foreign markets. Both types of firms were similarly involved in foreign activity. Firms
producing perishable goods preferred to use foreign production to enter foreign markets.
Seller concentration also did not affect the predictive ability of the model. Both firms with
few and many customers are similarly involved in foreign activity. Seller concentration
was not a determinant factor when deciding to enter foreign markets. The stimuli from
competition coming from outside their local markets (other domestic regions and abroad)
did not influence the decision to enter foreign markets.
Regarding the firms' interest in starting or expanding foreign activity, only three
determinants were important. Firms producing non-perishable products tended to be more
interested in starting or expanding their foreign activity. This may be caused by lower risk
levels involved in exporting due to the longer shelf life of their products. Firms with higher
R&D intensity were also more interested in foreign markets. Firms with higher intellectual
capital may have products which are differentiated by embodying more knowledge, giving
them an advantage in broader markets. The competitive environment was also a
determinant of foreign activity interest. Firms with low local competition and high
competition from abroad are more interested in foreign markets. Firms with lower local
competition are not obligated to strengthen their local market and can seek opportunities
abroad. Competition coming from outside their region and abroad can open a firm's
interest in global markets, since they see other doing it. Size did not have statistically
significant predictive power regarding a firm's interest in foreign activity. This may
indicate a trend where smaller firms are becoming more aware of the need to be active in
global markets. Smaller firms can take advantage of their size to gain versatility, and thus
be able to adapt more quickly to the changing economic environment that surrounds them.
L
33
Firms with interest in foreign activity were associated with only exporting as an
entry mode. This may indicate that firms first enter foreign markets by exporting, to test if
whether they can succeed abroad. This result supports the stages model of
internationalization theory (Bilkey and Tesar, 1978). Then, if the experience is positive,
they can evolve into other entry modes more suitable for their particular firm. The state
where the firms were located proved to be an important factor to decide to use other more
involved entry modes when going abroad. Firms located in New York were the ones that
had ownership interests abroad, and the majority of co-packing arrangements. This is likely
to be caused by the closeness (geographically, culturally, etc.) of N ew York to Canada,
which makes foreign activity easier. Diversification was also important, since firms
producing more than 10 products were more involved in warehouses abroad and copacking agreements. Firms that had licensing agreements abroad tended to have a higher
competitive pressure from local firms. This local competition may cause the firms to focus
on their domestic markets and select to use licensing agreements abroad in order to manage
more efficiently their scarce resources. Canada was the most common region for direct
export and warehouses. Mexico was for ownership interests. Firms preferred Europe, South
America and Asia when using indirect export as an entry mode. For copacking and
licensing, firms preferred South America and Western Europe. Mexico was also preferred
for co-packing.
Firms interested in direct exports, ownership interests or co-packing arrangements
abroad tended to already have experience in international markets. Firms producing nonperishable products tended to be interested in establishing warehouses abroad. Mainly
smaller, specialized fimls tended to be more interested in licensing agreements to enter
foreign markets. A lack of resources may cause this, making these smaller firms delegate
international responsibilities to their foreign partner. Europe was by far the market most
firms were interested in entering, for every entry mode, followed by the Asian markets.
Firms with experience'in foreign activity did not see lack of information or small
firm size as barriers, but rather price competition and tariff barriers and other government
regulations as obstacles to enter foreign markets. Through there own experience, these
have been difficult obstacles to avoid. The information needed was in contacts, "know
how", distribution, marketing strategy, customer information, shipping instructions,
labeling requirements, logistics and regulations. Lack of information and time was
perceived as a barrier for firms that had interest in starting foreign activity. Firms
producing perishable goods perceived a higher impact of price competition and inability to
provide training or service when entering foreign markets. Tariff barriers was a concern for
firms that were large, diversified or regular exporters. Firms of all sizes believed that they
were too small to enter foreign markets. When firms actually decide to go abroad, they
realize that size is not that important. This explains why firms of all sizes are involved in
foreign activity.
Firms that feel threatened by foreign competition tended to have experience or
interest in foreign markets, or source some of raw materials from abroad. Firms located in
Pennsylvania, produced non-perishable goods, had experience or interest in foreign
34
activity tended to be more aware of the need to be active in foreign markets. Smaller finns
tended to perceive opportunities abroad that they need to address. Larger, regular exporting
finns expressed that increasingly global markets will force them to be active
internationally. The exhaustion of local markets and the need to go abroad in order to
continue to grow may explain this result.
This study has limitations. By intentionally selecting the product categories to be
considered in order to include only finns that may have an interest in foreign markets may
not produce results that can be generalized to all smaller food finns.
This study has been dependent on survey data to create dependent variables and
independent variables to represent a model of the internationalization process. Andersen
(1993) argues that survey data only provides static managerial perceptions and often does
not incorporate the dynamic changes that managers need to face over time. Further studies
should involve the use of longitudinal case study analysis. This seems appropriate since a
cross-sectional design cannot document that finns proceed in stages nor detennine the
factors that influence a finn's move fonn one stage to the next (Root, 1994; Katsikeas, Deng
and W ortzel, 1997). Further stuqies should try to explore the cases in an attempt to
identify if there is an advantage to export directly as opposed to the option of outsourcing
exports by doing it indirectly. Small finns may believe that it is more efficient for them to
specialize in production and use independent intennediaries that specialize in international
marketing. Given the major contribution of job creation and regional restructuring, the
current trend is to encourage more small businesses to enter foreign markets in order to
increase their market potential. If the "stages model" proves inaccurate, one result may be
that there is no transition from indirect to direct
export, and the policy implications would be of great value. For example, instead of
focussing on trying to make finns move from one stage to a more "involved" stage of the
internationalization process when developing promotion programs, the policy-makers may
need to focus more on strengthening the current status of the finn, whether it's direct or
indirect exports, since that may be the only efficient avenue for them to pursue foreign
markets. This finn-level analysis would help guide the development of government exportsupport policies for small businesses.
8. CONCLUSIONS
.- .
The objective of this study is to gain a better understanding of the characteristics of
small to medium sized food finns in the Northeast (New York and Pennsylvania) that
influence their decision to be involved or interested in foreign markets. The study also
involved descriptive analysis of the barriers that affect smaller finn's foreign market entry
decisions as well as the regions they are involved and interested in for further foreign
activity.
35
I
The study involved the use of a survey that focussed on gathering infonnation on
the characteristics that differentiate finns involved in foreign markets from the ones not
involved, and of finns interested in starting or expanding their foreign activity from the
ones not interested. The survey was also designed to provide infonnation on the finns'
barriers to enter foreign markets as well as their perception on the challenges and
opportunities presented by increasingly global markets.
Of the 116 food-manufacturingfinns of New York and Pennsylvania that we
successfully contacted in the survey, 55 are involved in foreign activity or were in the past.
In addition, 73 finns in this sample said to be interested in starting or expanding their
foreign activity.
We grouped the detenninants that influence a finn's decision to enter or be
interested in entering foreign markets in seven categories: size, product type,
diversification/specialization, marketing knowledge advantage, R&D intensity, seller
concentration and competitive nature of the finn. We then tested these detenninants in a
series of logistic regression models in which the dependent variables were experience and
interest in foreign activity. The analysis also included correlation and cross-tabulations.
The analysis indicated that the characteristics found in finns that have experience in
foreign activity are large size, high diversification, less marketing knowledge and high R&D
intensity. The competitive environment of the finn proved to be an important detenninant of
foreign activity experience. Finns with low local and high domestic competition were more
involved and interested in foreign activity. Since size was not important when detennining a finn's
interest in foreign activity, smaller finns may be becoming more aware of the need to be active in
global markets. The characteristics associated with interest in starting or expanding foreign activity
were finns producing perishable products, offered a higher amount of own brands and had higher
R&D expenses as a percentage of total sales. In addition to low local and high domestic
competition, a high percent of foreign competition seemed to stimulate the finns' interest in foreign
activity.
~
,
1
i
i
,
;
I
l
Size was not significantly associated with any entry mode. In addition, finns
located in New York tended to be more involved in warehouses, ownership interests or copacking arrangements abroad, although finns 100.ated in Pennsylvania were more
interested in starting or expanding their exports. Canada, Mexico, Europe, South America
and Asia were the preferred foreign markets entered.
Finns with experience in foreign markets were associated with direct export
interest. Companies producing non-perishable products tended to be more interested in
establishing warehouses abroad. S!llall and more specialized finns tended to be more
interested in co-packing and licensing as entry modes. Europe was the market most finns
were interested in entering, for every entry mode.
,
I
Finns without experience in foreign activity described lack of infonnation as a
barrier for entering foreign markets. Finns with experience abroad described price
36
competition and tariff barriers and other government regulations as obstacles to enter
foreign markets. Lack of time was perceived as a barrier by firms that were specialized and
had interest in foreign activity. Firms producing perishable goods perceived a higher
impact of price competition and inability to provide training or service when entering
foreign markets. Tariff barriers was a concern for firms that were large and diversified.
Firms with no experience in foreign activity perceived their small size as a barrier. Almost
all firms believe that their size is too small before entering foreign markets. When firms
actually decide to go abroad, they realize that size is not that important. This explains why
firms of all sizes are involved in foreign activity.
Firms that felt threatened by foreign competition tended to have experience in
foreign activity. Firms producing non-perishable goods, with high R&D intensity and
experience abroad tended to be more aware of the need to be active abroad.
L
37
APPENDICES
t
..
38
APPENDIX 1. The survey instrument for New York and Pennsylvania.
Note: The following survey was used for New York finns and differs from the Pennsylvania survey in
questions 2 and 13 of part I, where references are made to Pennsylvania instead of New York.
ID#:
CORNELL
UNIVERSITY
1997 Food Industry Survey
on Global Competitiveness
The purpose of this survey is to learn how food finns in New York and Pennsylvania are responding
to challenges and opportunities presented by increasing global competitiveness.
In this survey, questions about your business refer to this local business. We would like your responses
to reflect only the infonnation relevant to this establishment, and not to other branches or affiliated units.
There are 4 parts to this survey. Please answer all of parts ~ and IV. Answer parts II and III only if
they apply to your company (see page 3). All responses will be kept strictly confidential.
If you have any questions, please contact Carlos Santos, Graduate Research Assistant, at (607) 255
1615 or bv e-mail: cas49(@cornell.edu. Thank vou!
Part I: COMPANY BUSINESS CHARACTERISTICS
1. What is your position within this business? (Circle ALL that apply.)
1 Owner
2 Chief Executive Officer / President 3
Plant Manager
4 Other (specify)
2. Which of the following best describes where your corporate headquarters is located? (Circle ONE
number. )
1 At this site
2 In New York state (specify) 3
In another state (specify) 4 In
another country (specify)
3. What is the nature of your business? (Circle ALL that apply.)
1 Processor
2 Manufacturer 3
Retailer
4 Distributor
5 Broker
6 Sales agent
7 Other (specify)
L
39
4. Please enter the beginning date (mm/dd/yy) of your most recent fiscal year:
Beginning date
/ /
5. What were your company's Total Sales for the most recent fiscal year? (Circle ONE response.)
1 Less than $1 million 2
$1-$9.9million
3 $10 - $99.9 million 4
$100 - $499.9 million 5
$500 million or more
6. What were your company's Total Book Value Assets for the most recent fiscal year? (Circle ONE
response. )
1 Less than $1 million
2 $1 - $9.9 million
3 $10 - $99.9 million 4
$100 - $499.9 million 5
$500 million or more
7. We'd like to know what products you offer. Please list up to four products ill order of their importance
to your business's total volume of sales and approximate their percentage contribution to your total
volume of sales.
Product or Service Description
Percent of Total
Volume of Sales
1.
2.
3.
4.
%
%
%
%
8. Excluding size and color variations, how many different products do you currently offer? (Circle
ONE response.)
1 Less than 10 2
10 - 99 3100-499
4 500 - 999
5 1000 or more
9. Excluding private labels, how many different brands do you currently offer? (Circle ONE response.)
I
~
.1
.1
1 Less than 10 2
10 - 49
3 50-199
4 200 or more
40
10. Approximately what percentage of your total volume of sales are:
Own Labels
Private Labels
%
%
11. Approximately what percentage of your total production is sold to your:
Top 4 buyers
Top 8 buyers
%
%
12. For the most recent fiscal year, approximately what percent of your company's Total Sales were:
Research and Development (R&D) Expenses
Marketing Expenses
%
%
13. What percent of your competitors are located in the following areas:
1. Upstate New York
2. Downstate New York (NY City and Long Island) 3.
North East (excluding NYS)
4. U.S. (excluding Northeast)
5. Outside the U.S.
=;:
100%
14. We'd like to get an idea of who your major suppliers are and the approximate percentage each
contributes to your total volume of purchases.
Major Suppliers (type, name, and location)
Percent of Total
Purchases
1.
2.
3.
4.
15. How many of all types of employees currently work here?
1. Number of full-time employees
2. Number of part-time employees
3. Number of temporary or seasonal employees
Total number of employees
The next 2 parts of this survey may not be applicable to your company:
Please note: "Foreign Activity" is defined as exporting, having warehouses or sales
offices abroad, having ownership in manufacturing operations abroad, having co
packing arrangements for foreign manufacturing and/or licensing.
%
%
%
%
T
41
i
Is your company interested in starting or expanding foreign activity? (Circle ONE response.)
I NO - Skip to Part IV. on the bottom half of page 6
2 NO, but did have foreign activity in the past
3 NO, but currently have foreign activity
4 YES, starting foreign activity - Skip to Part III. on page 6 5
YES, expanding foreign activity
PART II.
PAST AND CURRENT FOREIGN ACTIVITY
1. Is your company currently involved in exporting? (Circle ONE response.)
I NO - Skip to Question 5. 2
NO, but did in the past
3 YES
2. Which countries did you or do you currently export to, indirectly or directly, and approximately when
did exporting first begin? (Indirect Export is defined as through US brokers, distributors, or agents.
Direct Export is defined as through foreign brokers, distributors, or agents or directly to customers
abroad. )
(Please list.)
row.)
COUNTRY
1.
2.
3.
(Circle ONE
letter.)
(Check ONE box for each
INDIRECT
0
0
0
# OF YEARS AGO
a 2 or less b 3-5
c 6-8 d 9 or more
a 2 or less b 3-5
c 6-8 d 9 or more
a 2 or less b 3-5
c 6-8 d 9 or more
DIRECT
0
0
0
Please use additional sheets if necessary.
3. Is your exporting intermittent? If so, please explain.
4a. Approximately what percent of your company's Total Sales were or are:
%
%
Domestic Sales Foreign
Export Sales
= 100%
4b. Approximately what percent of Domestic Sales were or are:
%
%
Direct to customers
Through US brokers, distributors, or agents
= 100%
4c. Approximately what percent of Foreign Export Sales were or are:
Direct to customers abroad
Through US brokers, distributors, or agents
Through foreign brokers, distributors or agents
%
%
%
= 100%
42
5. Does your company currently have warehouses or sales offices established in foreign markets?
(Circle ONE response.)
1 NO - Skip to Question 7.
2 NO but did in the past
3 YES
6. In which countries did you or do you currently have warehouses or sales offices, and approximately
when were they first established?
(Please list.)
(Circle ONE letter.)
COUNTRY #OFYEARSAGO
1.
a 2 or less
b 3-5 c 6-8
2.
a 2 or less
b 3-5 c 6-8
3.
a 20rless ,b 3-5
c 6-8
d 9 or more d
9 or more d 9
or more
Please use additional sheets if necessary.
7. Does your company currently have an ownership interest in any foreign manufacturing operations?
(Circle ONE response.)
1 NO - Skip to Question 11.
2 NO, but did in the past
3 YES
8. In which countries did you or do you have ownership interest, what percentage of ownership, and
approximately when did ownership first begin?
(Please list.)
(Please provide.)
COUNTRY
1.
2.
3.
% OF OWNERSHIP
%
%
%
(Circle ONE letter.)
# OF YEARS AGO
a 2 or less
b 3-5
c 6-8
a 2 or less
b 3-5
c 6-8
a 2 or less
b 3-5
c 6-8
d 9 or more d
9 or more d 9
or more
Please use additional sheets if necessary.
9. Approximately what percent of your Total Sales were or are Foreign Affiliate Sales?
%
10. Approximately what percent of your Total Book Value Assets were or are Foreign Assets?
11. Are any of your company's products currently manufactured abroad through co-packing
arrangements? (Circle ONE response.)
%
1 NO - Skip to Question 13. 2
NO, but did in the past
3 YES
12. In which countries did you or do you currently have co-packing arrangements, and approximately
when did they first begin?
(Please list.)
(Circle ONE letter.)
COUNTRY #OFYEARSAGO
1.
a 2 or less
b 3-5 c 6-8
2.
a 2 or less
b 3-5 c 6-8
3.
a 2 or less
b 3-5 c 6-8
d 9 or more d
9 or more d 9
or more
Please use additional sheets if necessary.
r
43
13. Is your company currently involved in licensing technology or brand names for use in any foreign
country? (Circle ONE response.)
1 NO - Skip to Question 17. 2
NO, but did in the past
3 YES
14. In which countries did you or do you currently license, and approximately when did licensing first
begin?
(Please list.)
COUNTRY
1.
2.
3.
(Circle ONE letter.)
# OF YEARS AGO
a 2 or less b 3-5 c 6-8
a 2 or less b 3-5 c 6-8
a 2 or less b 3-5 c 6-8
d 9 or more d
9 or more d 9
or more
Please use additional sheets if necessary.
15. Approximately what percent of your company's Total Sales were or are Licensing
Income? %
16. Does your company produce under license from a foreign firm? (Circle ONE response.)
No
2 Yes
17. Does your company take advantage of the following in entering foreign markets? (Circle ALL that
apply.)
1 Government programs, services, and agencies (specify) 2
Participate in trade delegations (specify)
3 Attend trade fairs (specify)
4 Other (specify)
PART III.
FUTURE FOREIGN ACTIVITY
1. How interested is your company in starting or expanding the following foreign activities? (Circle
ONE number on the following scale for each alternative.)
Foreign Activity
UnHave Not Somewhat
Very
Interested Considered Interested Interested
Indirect Export
I
2
3
4
111
I
1"
1
Direct Export
I
2
3
4
Establishing.warehouses or sales offices abroad
1
2
3
4
Minority ownership in foreign manufac. Operations
I
2
3
4
Majority ownership in foreign manufac. Operations
I
2
3
4
Co-packing arrangements for foreign manufacturing
I
2
3
4
Licensing
I
2
3
4
44
2. If you circled "3" or "4" in Question I above, please list the countries or regions in which you are
interested in starting or expanding the foreign activity. Otherwise, - Skip to Part IV. below
Foreign Activity
Country/Region
Country/Region
Country/Region
Indirect Export
Direct Export
Establishing warehouses or sales offices abroad
Minority ownership in foreign manufac. Operations
Majority ownership in foreign manufac. Operations
Co-packing arrangements for foreign manufacturing
Licensing
Please use additional sheets if necessary.
PART
IV.
ATTITUDES TOWARD FOREIGN ACTIVITY
1. What do you feel are the major barriers to increasing your company's international sales? (Circle
ALL that apply.)
I Lack of information
2 Time
3 Price competition
4 Tariff barriers
5 Other regulations by foreign governments (specify) 6
Inability to provide training or service
7 Company size too small
8 Other (specify)
2. If you circled" 1" in Question I above, specifically what kind of information does your company
need?
3.
4.
1.
2.
3a. Does your company feel threatened by foreign competition in the U.S.? (Circle ONE response.)
No - Skip to Question 4.
2 Yes
3b. If Yes, which of the following helps to explain this? (Circle ALL that apply.)
I Increasing number of foreign firms are taking away our business
2 Foreign firms have lower overall costs of doing business
3 Foreign firms have more advanced technology
4 Local firms who are active in foreign markets are more competitive than we are 5
Other (specify)
4a. Does your company feel the need to be (more) active in foreign markets? (Circle ONE response.)
No - Skip to Question 5.
2 Yes
I
f
45
4b. If Yes, which of the following helps to explain this? (Circle ALL that apply.)
1 Local finns who are active in foreign markets are more competitive than we are 2
There are opportunities abroad we are not taking advantage of
3 Increasingly global markets will force us to be active internationally
4 Other (specify)
Sa. Does your company see the need for strategic alliances (partnerships)? (Circle ONE response.)
2 Yes
No
Sb. If Yes, what types of strategic alliances (partnerships)?
3.
4.
1.
2.
6a. Does your finn source raw materials from foreign finns or fanns? (Circle ONE re,sponse.)
2 Yes
No
6b. If Yes, what kinds of raw materials?
3.
4.
1.
2.
-----------------------------------------------------------------------------------------------------------------------
Would you like a summary of the survey results?
D No
DYes
And if we need to clarify any responses, how can we reach you?
I
Name
Telephone Number
THANK YOU FOR YOUR HELP IN THIS IMPORT ANT STUDY! PLEASE ENCLOSE THE
COMPLETED SURVEY IN THE ENVELOPE PROVIDED AND MAIL IT TO US TODAY.
46
APPENDIX 2. Cover letter for New York firms contacted by telephone and willing to
participate in the survey.
«Date»
«First Name» «Last Name»
«Company _Name»
«Street»
«City», «State _» «Zip»
Dear Mr. «Last_Name»,
Thank you for consenting on the telephone today to take a look at the enclosed survey I
referred to. Professor James M. Hagen and I are conducting a study on the foreign activity
of U.S. food firms. We would be most grateful if you would take the time to help us by
completing and returning the survey. Your participation is very important to the success of
our study.
Please note that your company need only be interested, not necessarily involved, in foreign activity
to provide meaningful infonnation for analysis. Also, no individual responses will be reported,
though a summary report of our survey results will be available to you upon request (a space is
provided on the survey). Even if you still feel that certain information can not be provided, we
would greatly appreciate it if you would fill out as much of the survey as possible.
As you know, markets are increasingly global and integrated, and they present opportunities and
challenges to food firms. The objective of our study, which is partially sponsored by the
Metropolitan Development Association (MDA) of Syracuse & Central
New York and supported by Mr. William Kimball, Development Administrator of
Agricultural Business, New York Department of Agriculture (please see enclosed letter), is to
assess the global competitiveness of food firms in the Northeast (New York and Pennsylvania). The
survey component will help identify global strategies that have been effective for particular firms.
Please return the survey in the stamped envelope provided. If you have any questions,
please contact Charmaine lng, Graduate Research Assistant, at (607) 254-7491 or by email: cti 1@cornell.edu.
"
;
Thank you very much for your time and support of our research.
Sincerely,
Charmaine Ing
Graduate Research Assistant
T
I
47
APPENDIX 3. Cover letter for New York finns not contacted by telephone
«Date»
«First Name» «Last Name»
«Company_Name»
«Street»
«City», «State _» «Zip»
Dear Mr. «Last_Name»,
I am sorry I could not reach you in person on the telephone today, but hope you received
my message regarding the enclosed survey. Professor James M. Hagen and I are
conducting a study on the foreign activity of U.S. food finns. We would be most grateful if
you would take the time to help us by completing and returning the survey. Your
participation is very important to the success of our study.
Please note that your company need only be interested, not necessarily involved, in foreign activity
to provide meaningful infonnation for analysis. Also, no individual responses will be reported,
though a summary report of our survey results will be available to you upon request (a space is
provided on the survey). Even if you still feel that certain infonnation can not be provided, we
would greatly appreciate it if you would fill out as much of the survey as possible.
As you know, markets are increasingly global and integrated, and they present opportunities and
challenges to food finns. The objective of our study, which is partially sponsored by the
Metropolitan Development Association (MDA) of Syracuse & Central
New York and supported by Mr. William Kimball, Development Administrator of
Agricultural Business, New York Department of Agriculture (please see enclosed letter), is to
assess the global competitiveness of food finns in the Northeast (New York and Pennsylvania). The
survey component will help identify global strategies that have been effective for particular finns.
Please return the survey in the stamped envelope provided. If you have any questions,
please contact Channaine lng, Graduate Research Assistant, at (607) 254-7491 or by email: ctil@cornell.edu.
Thank you very much for your time and support of our research.
Sincerely,
Channaine Ing
Graduate Research Assistant
48
APPENDIX 4. Cover letter sent to New York and Pennsylvania
«Date»
«First Name» «Last Name»
«Company_Name»
«Street»
«City», «State _» «Zip»
Dear Mr. «Last_Name»,
Professor James M. Hagen and I are conducting a study of the global competitiveness of
the food industry in New York and Pennsylvania. We would be most grateful if you would
take the time to help us by completing and returning the enclosed survey. Your
participation is very important to the success o,f our study.
Please note that your company need only be interested, not necessarily involved, in foreign activity
to provide meaningful information for ,analysis. Also, no individual responses will be reported,
though a summary report of our survey results will be available to you upon request (a space is
provided on the survey). Even if you still feel that certain information can not be provided, we
would greatly appreciate it if you would fill out as much of the survey as possible.
Our research unit has undertaken this study in order to assess the response to the
challenges and opportunities presented by the increasing global competitiveness. The
survey component will help identify global strategies that have been effective for
particular firms. In order for the results of this study to be truly representative of the food
firms in New York and Pennsylvania, it is essential that each survey is completed and
returned for analysis.
Please return the survey in the stamped envelope provided. If you have any questions,
please contact Carlos Santos, Graduate Research Assistant, at (607) 255-1615, by fax at
(607) 255-4776, or bye-mail: cas49@cornell.edu.
Thank you very much for your time and support of our research.
Sincerely,
Carlos Santos
Graduate Research Assistant
49
APPENDIX 5. Post card sent for first follow-up to New York and Pennsylvania firms.
Dear
Last week we mailed the "1997 Food Industry Survey on Global Competitiveness" to you. The purpose of
this study is to determine the attitudes of the food industry towards global competitiveness.
If you have already completed and returned it to me, please accept my sincere thanks. If not, I would be most
grateful if you would do so today. Your participation is extremely important to the success of our study.
If you did not receive a survey, or it was misplaced, please call me at (607) 255-1615, and I will mail another
one to you today.
Once again, thank you for your time and support of our research.
Sincerely,
Carlos Santos
Graduate Research Assistant
APPENDIX 6. Thank you post card sent to New York and Pennsylvania firms.
Dear
Thank you very much for taking the time to complete the "1997 Food Industry Survey on Global
Competitiveness" that was mailed to you.
Your participation is extremely important to t~e success of this study.
If you requested a summary of the survey results (by indicating so on the survey), I will send it to you as
soon as it is available. If you did not request a copy but would like to receive one, please call me at (607)
255-1615.
Once again, thank you for your time and support of our research.
,i
f
I'
Sincerely,
Carlos Santos
Graduate Research Assistant
50
APPENDIX 7. Second follow-up letter sent to New York and Pennsylvania
«Date»
«First Name» «Last Name»
«Company _ N ame»«Other
_Name»
«Street»
«City», «State _» «Zip»
Dear Mr. «Last_Name»,
About three weeks ago, I sent you a survey we are conducting for a study of the global
competitiveness of the food industry in New York and Pennsylvania. As of today we have
not yet received your completed questionnaire.
Please remember that your company need only be interested, not necessarily involved, in
foreign activity to provide meaningful information for analysis. Also, no individual
responses will be reported, though a summary report. of our survey results will be available
to you upon request (a space is provided on the survey). Even if you still feel that certain
information can not be provided, we would greatly appreciate it if you would fill out as
much of the survey as possible.
Our research unit has undertaken this study in order to assess the response to the challenges
and opportunities presented by the increasing global competitiveness. The survey
component will help identify global strategies that have been effective for particular firms.
I am writing to you again because of the significance each questionnaire has to the
usefulness of this research. In order for the results of this study to be truly representative of
the food firms in New York, it is essential that each survey is completed and returned for
analysis. You can also have in mind that the survey may be completed partially considering
only the questions that apply to your business.
In the event that your survey has been misplaced, a replacement is enclosed. Please return the
survey in the stamped envelope provided. If you have any questions, please contact Carlos Santos,
Graduate Research Assistant, at (607) 255-1615, by fax at (607) 255-4776, or bye-mail:
cas49@cornell.edu.
4.
Thank you very much for your time and support of our research. Your cooperation is
greatly appreciated.
Cordially,
Carlos Santos
Graduate Research Assistant
51
APPENDIX 8. Third follow-up letter sent to New York and Pennsylvania finns
«Date»
«First Name» «Last Name»
«Company_Na
me»
«Street»
«City», «State _» «Zip»
Dear Mr. «Last_Name»,
I am writing to you about our study of the global competitiveness of the food industry in
New York and Pennsylvania. We are still hopeful of receiving your completed
questionnaire.
The large number of surveys returned is very encouraging. But, whether we will be able to
describe accurately how the food industry in these Northeastern states is responding to
challenges and opportunities presented by increasing global competitiveness, depends
upon you and the others who have not yet responded. In order for the results of this study
to be truly representative, it is essential that each survey is completed and returned for
analysis. You can also have in mind that the survey may be completed partially
considering only the questions that apply to your business.
Please remember that your company need only be interested, not necessarily involved, in foreign
activity to provide meaningful information for analysis. Also, no individual responses will be
reported, though a summary report of our survey results will be available to you upon request (a
space is provided on the survey). Even if you still feel that certain infonnation can not be provided,
we would greatly appreciate it if you would fill out as much of the survey as possible.
Our research unit has undertaken this study in order to assess the response to the
challenges and opportunities presented by increasing global competition. The survey
component will help identify global strategies that have been effective for particular finns.
The usefulness of our results depends on how accurately we are able to describe the
attitudes of the food finns in New York. It is for these reasons that I am sending this by
certified mail to insure delivery. In case our earlier correspondence did not reach you, I am
enclosing a replacement questionnaire and a self addressed stamped envelope. I will be
grateful if you return the completed questionnaire by return mail. If you have any
questions, please contact me at (607) 255-1615, by fax at (607) 255-4776, or bye-mail:
cas49@cornell.edu. .
Your contribution to the success of this study will be appreciated greatly.
Most sincerely,
Carlos Santos
Graduate Research Assistant
APPENDIX 9. Correlation table for firm characteristics
STATE
1
STATE
TOTSALE
TOTASET
SIC CODE
TYPEPROD
NUMPROD
NUMBRAND
OWNLABEL
Sig.
TOTSALE
0.238**
0.011
0.167*
0.092
-0.063
0.498
-0.072
0.444
0.074
0.432
-0.051
0.593
-0.009
0.925
-0.176*
0.085
-0.074
0.484
-0.062
0.570
0.132
0.207
-0.182*
0.096
0.323***
0.003
-0.014
0.899
-0.061
0.581
0.308***
0.001
Sig.
TOT ASSET
Sig.
SIC CODE
Sig.
TYPEPROD
Sig.
NUMPROD
Sig.
NUMB RAND
Sig.
OWNLABEL
Sig.
4BUYER
Sig.
8BUYER
Sig.
R&DEXP
Sig.
MARKET
Sig.
LOCCOMP
Sig.
REGCOMP
Sig.
DOMCOMP
Sig.
FORCOMP
Sig.
FULLEMP
Sig.
v,.
....
...
1
0.826***
0.000
-0.151
0.110
-0.326***
0.000
0.410***
0.000
0.087
0.369
-0.046
0.645
-0.134
0.198
-0.184*
0.083
-0.156
0.153
-0.178*
0.094
-0.326***
0.003
0.130
0.243
0.331 ***
0.002
-0.093
0.407
0.642***
0.000
1
-0.208**
0.035
-0.264***
0.007
0.419***
0.000
0.053
0.594
-0.054
(0.600)
-0.096
(0.379)
-0.210*
(0.056)
-0.099
0.385
-0.205*
0.059
-0.316***
0.006
0.062
0.597
0.464***
0.000
-0.174
0.134
0.606***
0.000
1
0.576***
0.000
-0.065
0.488
-0.018
0.851
0.028
0.776
-0.033
0.751
-0.072
0.490
0.153
0.158
0.205**
0.049
0.110
0.318
0.090
0.415
-0.249**
0.022
0.073
0.508
-0.079
0.406
1
-0.271***
.0.003
-0.032
0.738
-0.045
0.646
0.077
0.455
0.058
0.581
0.023
.0.836
0.035
0.742
0.077
0.482
0.088
0.423
-0.221 **
0.042
0.087
0.427
-0.251***
0.007
1
0.334***
0.000
0.036
0.714
-0.253**
0.013
-0.307***
0.003
-0.024
0.824
-0.105
0.318
-0.115
0.294
0.117
0.287
0.126
0.250
-0.128
0.243
0.345***
0.000
1
-0.169*
0.081
-0.113
0.274
-0.055
0.605
-0.068
0.532
-0.140
0.184
0.008
0.941
"0.117
0.294
-0.018
0.873
-0.118
0.287
-0.011
0.911
1
-0.168
0.110
-0.155
0.150
0.039
0.727
0.005
0.964
0.120
0.291
-0.025
0.828
-0.104
0.361
-0.018
0.876
0.083
0.398
v.
N
,
I
--
~ ..
.--,
APPENDIX 9 (CONT.)
4BUYER
1
4BUYER
8BUYER
R&DEXP
MARKET
LOCCOMP
REGCOMP
DOMCOMP
FORCOMP
Sig.
8BUYER
Sig.
R&DEXP
Sig.
MARKET
Sig.
LOCCOMP
Sig.
REGCOMP
Sig.
DOMCOMP
Sig.
FORCOMP
Sig.
FULLEMP
Sig.
0.821 ***
1
0.000
-0.060
0.022
1
0.594
0.849
-0.156
-0.195*
0.410***
1
0.155
0.080
0.000
-0.060
0.002
-0.081
0.108
1
0.627
0.986
0.526
0.376
0.009
0.245**
-0.213*
-0.044
-0.368***
1
0.939
0.045
0.091
0.719
0.001
0.014
-0.180
0.141
-0.142
-0.591 ***
-0.264**
0.907
0.146
0.266
0.242
0.000
0.015
0.052
-0.058
0.189
0.082
-0.347***
-0.187*
0.670
0.641
0.135
0.500
0.001
0.086
-0.151
-0.164
-0.080
-0.070
-0.172
0.122
0.141*** = Pr?bability
0.116 level < 0.01;
0.462** = Probability
0.503level < 0.05;
0.120
0.271
* = Probability
level <
0.1
1
-0.161
0.141
0.116
0.297
1
-0.028
0.805
VI
W
APPENDIX 10. Correlation table for finn entry mode and finn characteristics.
Foreign
activity
experience
0.063
0.500
0.370***
0.000
-0.043
0.647
-0.1 09
0.242
0.230**
0.013
Foreign
activity
interest
0.248***
0.007
0.218**
0.021
-0.240***
0.009
-0.127
0.174
-0.003
0.956
Current
export
Activity
0.026
0.849
-0.001
0.995
0.049
0.721
0.077
0.578
-0.107
0.435
Intermittent
exporting
0.164
0.241
-0.444***
0.001
-0.059
0.677
0.161
0.249
-0.231 *
0.096
Intermittent and
seasonal
exporting
0.039
0.783
-0.248*
0.083
0.041
0.773
0.163
0.243
-0.212
0.128
NUMB RAND
0.015
0.046
-0.073
0.129
0.263*
Sig.
OWNLABEL
Sig.
4BUYER
Sig.
R&DEXP
Sig.
MARKET
Sig.
LOCCOMP
Sig.
REGCOMP
Sig.
DOMCOMP
Sig.
FORCOMP
Sig.
INTEREST F.A
Sig.
SOURCE RAW
Sig.
0.872
0.065
0.504
-0.215**
0.034
0.220**
0.041
-0.092
0.378
-0.294***
0.006
-0.023
0.832
0.305***
0.005
0.067
0.543
0.550***
0.000
0.071
0.479
0.625
-0.1l2
0.250
-0.048
0.642
0.203*
0.059
0.031
0.770
-0.334***
0.002
-0.030
0.788
0.304***
0.005
0.141
0.199
1.000
0.609
-0.001
0.996
0.129
0.392
0.153
0.333
-0.088
0.569
-0.082
0.611
-0.001
0.993
0.221
0.164
-0.181
0.258
0.349***
0.009
-0.016
0.910
0.373
-0.067
0.650
0.123
0.428
-0.058
0.721
-0.089
0.572
0.049
0.762
0.054
0.740
-0.168
0.299
0.092
0.571
-0.038
0.787
0.177
0.224
0.065
-0.176
0.230
0.074
0.633
-0.131
0.414
-0.293*
0.056
0.062
0.705
0.020
0.901
-0.143
0.377
0.081
0.618
0.195
0.161
0.070
0.632
STATE
Sig.
TOTSALE
Sig.
SIC CODE
Sig.
TYPEPROD
Sig.
NUMPROD
Sig.
-0.154
0.123
Current
warehouse
activity
-0.253*
0.062
0.020
0.886
0.091
0.510
-0.162
0.237
0.236*
0.082
0.047
Current
ownership
abroad
-0.229**
0.026
0.075
0.596
0.070
0.613
-0.199
0.145
0.016
0.909
-
0.739
0.090
0.533
-0.130
0.390
0.223
0.156
-0.001
0.993
0.254
0.110
-0.116
0.471
0.006
0.971
-0.224
0.159
-0.081
0.555
0.081
0.572
0.172
0.223
0.232
0.106
0.098
0.516
0.071
0.657
0.069
0.656
0.221
0.165
-0.225
0.158
0.020
0.903
-0.073
0.652
0.100
0.468
0.085
0.551
Current copacking
abroad
-0.298**
0.029
0.041
0.773
0.119
0.391
-0.166
0.229
0.259*
0.059
0.194
Current
licensing
0.172
0.129
0.378
0.048
0.752
0.190
0.234
-0.094
0.548
0.253
0.115
-0.110
0.498
-0.098
0.549
-0.090
0.580
-0.047
0.738
0.035
0.809
0.319
0.159
0.269
-0.190
0.206
0.025
0.875
0.031
0.841
0.493***
0.001
-0.166
0.300
-0.248
0.119
-0.158
0.323
-0.155
0.259
0.017
0.905
-0.125
0.363
0.162
0.250
0.144
0.293
0.187
0.171
0.033
0.811
-0.141
V
1.j:
>.
r
1
55
APPENDIX 11. COITelation table for foreign activity interest and firm characteristics.
STATE
Sig.
TOTSALE
Sig.
SIC CODE
Sig.
TYPEPROD
Sil!.
NUMPROD
Sig.
NUMB RAND
Sig.
OWNLABEL
Sig.
4BUYER
Sil!.
R&DEXP
Sig.
MARKET
Sig.
LOCCOMP
Sil!.
REGCOMP
Sil!.
DOMCOMP
Sil!.
FORCOMP
Sig.
Experience fac.
Sil!.
Interest factivit.
Sig.
Current exporter
Sig.
Intermittent exp
Sig.
Intermt/seasonal
Sig.
Current wareho
Sil!.
CurrentFDI
Sig.
Current Co-pak
Sil!.
Current licensin
Sig.
Source abroad
Sig.
Interest
indirect
eXDort
0.173
0.152
-0.134
0.274
0.063
0.603
0.128
0.291
-0.160
0.186
-0.218*
0.071
0.034
0.790
-0.101
0.438
0.138
0.315
0.040
0.765
0.153
0.288
-0.429***
0.002
0.128
0.374
0.019
0.894
-0.197
0.102
0.218*
0.069
0.360**
0.012
0.205
0.172
0.076
0.617
0.014
0.922
-0.076
0.606
-0.223
0.132
-0.005
0.973
0.152
0.216
Interest
direct
export
0.251 **
0.031
0.113
0.349
0.093
0.428
-0.087
0.463
0.076
0.518
-0.144
0.230
0.062
0.612
-0.197
0.118
0.143
0.284
0.092
0.486
-0.180
0.194
0.078
0.573
0.155
0.262
-0.034
0.809
0.110
0.352
0.387***
0.001
0.554***
0.000
-0.160
0.268
-0.121
0.402
-0.025
0.859
-0.054
0.704
-0.205
0.149
-0.105
0.457
0.098
0.419
Interest
warehouses
abroad
-0.145
0.237
-0.027
0.829
0.223*
0.067
0.015
0.904
0.030
0.805
0.001
0.996
0.015
0.904
-0.112
0.389
0.189
0.168
0.063
0.641
0.277*
0.054
-0.069
0.637
-0.125
0.393
-0.145
0.319
0.113
0.358
0.048
0.696
-0.152
0.308
-0.127
0.407
-0.071
0.641
0.557***
0.000
0.203
0.171
0.402***
0.006
-0.005
0.976
0.072
0.563
Interest
minority
ownership
-0.079
0.520
-0.078
0.530
0.258**
0.034
0.007
0.954
-0.108
0.380
-0.065
0.601
-0.177
0.161
0.134
0.308
0.345**
0.010
-0.015
0.910
-0.051
0.730
0.029
0.845
-0.041
0.781
0.092
0.534
0.014
0.910
0.105
0.396
0.139
0.353
-0.022
' 0.886
0.011
0.945
0.244*
0.099
0.138
0.354
0.210
0.161
-0.175
0.241
0.088
0.481
Interest
majority
ownership
0.019
0.881
-0.019
0.881
0.249**
0.042
0.116
0.351
-0.060
0.631
-0.136
0.271
0.010
0.936
0.152
0.245
0.203
0.136
-0.034
0.804
0.090
0.542
0.198
0.177
-0.260*
0.074
0.033
0.823
0.066
0.597
0.086
0.491
0.122
0.418
-0.020
0.899
0.008
0.959
0.265*
0.075
0.196
0.191
0.244
0.106
0.041
0.785
-0.004
0.972
Interest copacking
Interest
licensing
0.046
0.701
-0.319***
0.008
-0.008
0.944
0.024
0.842
-0.229*
0.055
0.009
0.941
-0.137
0.265
-0.031
0.812
0.046
0.736
-0.103
0.422
0.192
0.172
-0.133
0.348
-0.089
0.530
-0.027
0.848
-0.187
0.118
0.169
0.159
-0.116
0.426
0.037
0.807
-0.007
0.963
0.360**
0.011
0.121
0.408
0.266*
0.067
-0.101
0.489
-0.075
0.539
0.176
0.154
-0.240*
0.056
0.261 **
0.033
0.188
0.128
-0.279**
0.022
-0.091
0.463
0.043
0.734
-0.229*
0.079
0.356***
0.008
0.164
0.228
0.165
0.261
-0.095
0.520
-0.135
0.362
0.041
0.782
-0.172
0.165
0.133
0.285
0.154
0.308
0.076
0.624
0.026
0.868
0.216
0.149
0.091
0.547
-0.051
0.740
0.235
0.116
0.140
0.261
56
APPENDIX 12. Correlation table for entry barriers and firm characteristics.
Lack of
infonnation
Lack of
time
Price
Tariff
Other
Training!
compebarriers
foreign
service
tition
barriers
inability
STATE
-0.039
-0.044
0.040
0.024
0.091
-0.038
Sig.
0.695
0.656
0.682
0.810
0.352
0.700
TOTSALE
-0.047
-0.040
0.099
0.356***
0.194**
0.002
Sig.
0.638
0.685
0.318
. 0.981
0.000
0.049
SIC CODE
-0.140
0.109
-0.134
0.013
-0.044
-0.073
Sig.
0.153
0.267
0.170
0.898
0.655
0.459
TYPEPROD
0.023
0.096
-0.197**
-0.153
-0.008
-0.173*
Sig.
0.815
0.327
0.043
0.118
0.935
0.076
NUMPROD
-0.085
-0.037
0.1 02
0.276***
0.093
0.084
Sig.
0.384
0.709
0.297
0.004
0.345
0.390
NUMB RAN
-0.012
-0.195*'"
0.020
0.041
-0.001
0.073
Sig.
0.901
0.047
0.842
0.679
0.991
0.461
OWNLABEL
-0.107
-0.207**
-0.116
0.136
-0.140
0.067
Sig.
0.294
0.041
0.255
0.181
0.169
0.515
4BUYER
0.192*
-0.114
-0.175*
-0.233**
0.032
-0.043
Sig.
0.283
0.098
0.027
0.767
0.684
0.070
R&DEXP
0.051
0.246**
-0.101
0.135
-0.067
0.327***
Sig.
0.648
0.027
0.932
0.229
0.555
0.003
MARKET
0.023
0.227**
-0.127
-0.118
-0.065
0.039
Sig.
0.832
0.035
0.244
0.277
0.554
0.723
LOCCOMP
0.118
-0.107
-0.163
-0.231 ** -0.232**
0.018
Sig.
0.305
0.352
0.153
0.042
0.041
0.878
REGCOMP
-0.143
-0.044
-0.136
0.014
0.027
-0.070
Sig.
0.211
0.699
0.236
0.900
0.812
0.540
DOMCOMP
-0.007
0.010
0.168
0.223**
0.211 *
0.093
Sig.
0.954
0.934
0.141
0.042
0.064
0.420
FORCOMP
-0.013
0.208*
0.174
0.030
0.035
-0.080
Sig.
0.910
0.068
0.127
0.797
0.761
0.484
ExpeL f.activ
-0.172*
0.026
0.204**
0.523***
0.214**
-0.050
Sig.
0.077
0.792
0.036
0.000
0.028
0.607
Interest f.acti
0.220**
0.194**
0.132
0.191**
0.127
0.002
0.176
0.050
0.193
0.982
Sig.
0.024
I 0.046
Current expor
0.161
0.097
0.200
0.155
0.212
0.039
Sig.
0.258
0.496
0.159
0.278
0.135
0.786
Intennit expo
0.108
0.032
-0.010
-0.333**
0.040
-0.130
Sig.
0.460
0.829
0.945
0.019
0.787
0.372
Intennt/seas
0.239*
0.041
0.045
-0.432***
-0.078
-0.101
Sig.
0.099
0.779
0.758
0.002
0.595
0.492
Current wareh
-0.203
-0.017
-0.081
0.132
-0.112
0.278**
Sig.
0.152
0.904
0.572
0.355
0.436
0.048
Current FDI
-0.193
-0.233
0.047
-0.005
-0.118
-0.047
Sig.
0.175
0.745
0.971
0.411
0.745
0.100
I
Current co-pk
-0.245*
-0.182
-0.144
0.134
-0.117
Sig.
0.086
0.205
0.317
0.355
0.419
Current licen
-0.171
-0.206
-0.163
-0.064
0.228
-0.041
Sig.
0.231
0.146
0.252
0.653
0.108
0.774
Source
abroad
0.092
0.170*
0.090
-0.054
0.087
0.006
NOTE: I no mesure of association was computed because at least one variable is a constant
Sig.
0.365
0.093
0.374
0.595
0.957
0.393
Small size
Other
barriers
-0.056
0.569
-0.227**
0.021
0.054
0.584
0.080
0.412
-0.161*
0.099
-0.128
0.197
-0.028
0.787
0.096
0.368
0.151
0.179
0.045
0.684
0.258**
0.023
0.038
0.738
-0.134
0.242
-0.263**
0.020
-0.269***
0.005
-0.227**
0.019
0.033
0.819
-0.092
0.528
0.043
0.771
0.075
0.601
-0.173
0.225
-0.082
0.572
-0.153
0.284
0.049
0.628
0.083
0.398
0.106
0.285
0.011
0.911
-0.031
0.752
-0.027
0.782
0.074
0.454
0.135
0.186
-0.026
0.807
0.017
0.881
0.077
0.481
0.027
0.813
-0.020
0.862
-0.097
0.398
0.119
0.297
0.180*
0.065
-0.009
0.926
-0.326**
0.020.
0.210
0.166
-0.024
0.869
0.136
0.340
0.366***
0.008
0.310**
0.029
0.292**
0.038
0.005
0.964
57
APPENDIX 13. Correlation table for Perception of Threat and Finn Characteristics.
STATE
Sig.
TOTS ALE
Sig.
SIC CODE
Sig.
TYPEPROD
Sig.
NUMPROD
Sig.
NUMB RAN
Sig.
OWNLABEL
Sig.
4BUYER
Sig.
R&DEXP
Sig.
MARKET
Sig.
LOCCOMP
Threatened by
foreign
competition
0.002
0.981
0.118
0.237
-0.077
0.434
0.033
0.738
-0.120
0.222
-0.129
0.196
-0.206**
0.043
0.056
0.599
0.145
0.203
-0.003
0.975
-0.287**
Increase in
foreign
takeover
-0.255
0.307
0.125
0.634
0.545**
0.019
0.152
0.546
0.089
0.725
0.299
0.244
-0.511 **
0.043
-0.060
0.826
0.308
0.246
-0.021
0.941
0.038
Lower foreign
cost of
business
0.055
0.827
-0.314
0.220
-0.228
0.363
-0.033
0.896
-0.368
0.133
-0.387
0.125
0.004
0.989
0.274
0.304
-0.229
0.393
0.024
0.931
-0.084
Sig.
REGCOMP
0.010
0.094
0.898
-0.346
0.775
0.212
Sig.
DOMCOMP
0.408
0.147
0.226
0.199
0.467
-0.329
More
advanced
foreil1:n tech.
-0.217
0.387
0.319
0.213
-0.125
0.622
-0.454*
0.059
0.076
0.765
-0.063
0.812
-0.334
0.205
I
I
I
Local
exporters
more compet.
-0.400
0.100
0.286
0.266
-0.033
0.897
-0.120
0.637
-0.070
0.783
0.540**
0.025
-0.508**
0.045
-0.297
0.265
-0.198
0.461
-0.254
0.360
-0.055
0.827
-0.194
0.455
-0.046
0.857
0.033
0.896
0.019
0.939
-0.139
0.596
0.224
0.403
-0.386
0.140
0.341
0.196
-0.036
0.897
I
-0.077
0.792
0.874
I
-0.272
0.348
0.250
0.389
I
0.358
0.196
0.494
0.251
0.209
I
0.142
0.223
0.277
-0.019
0.212
0.443
0.338
0.949
0.305***
0.051
-0.277
0.108
0.200
0.002
0.841
0.265
0.668
0.426
0.197**
0.282
-0.219
0.086
0.158
0.044
0.257
0.382
0.735
0.531
I
I
I
I
0.186
Sig.
0.190
Intermit expo
-0.075
-0.389
0.289
-0.218
-0.068
Sig.
0.607
0.152
0.297
0.435
0.810
Intermtlseaso
-0.114
-0.312
0.231
-0.175
-0.055
Sig.
0.437
0.258
0.407
0.533
0.847
Current wareh
-0.031
-0.068
-0.134
-0.250
0.000
Sig.
0.828
0.810
1.000
0.635
0.369
Current FDI
0.061
-0.320
0.277
-0.105
-0.196
Sig.
0.669
0.245
0.317
0.710
0.484
Current co-pk
-0.167
-0.207
0.175
-0.077
-0.145
Sig.
0.247
0.478
0.549
0.794
0.621
Current licen
-0.040
-0.218
0.189
-0.071
-0.134
NOTE: I no
me sure of
association was0.435
computed because
at least one variable
Sig.
0.780
0.500
0.800is a constant 0.635
Source abroad
0.221**
-0.161
0.088
0.171
0.000
Sig.
0.028
0.523
0.729
0.496
1. 000
Sig.
FORCOMP
Sig.
Exper. f.activt
Sig.
Interest f.acti
Sig.
Current expor
Other reasons
of threat
-
0.047
-0.159
0.587
-0.230
0.429
0.277
0.265
0.219
0.382
I
0.000
1. 000
0.000
1.000
0.000
1.000
-0.277
0.317
-0.175
0.549
-0.189
0.500
-0.614***
0.007
58
APPENDIX 14. C
lation table fc
ds of fc
tivit
dfi
h
terist'
Need to be
Local exporters Opportunities
Forced by
Other reasons
more active in
are more
abroad
increasingly
of need for
foreign market
competitive
global markets foreign activtv
STATE
0.190*
-0.194
-0.159
-0.354**
0.156
Sig.
0.057
0.182
0.274
0.013
0.285
TOTS ALE
0.149
-0.069
-0.274*
0.293**
0.006
Sig.
0.143
0.641
0.059
0.043
0.966
SIC CODE
-0.218**
0.203
0.149
0.157
0.020
Sig.
0.028
0.161
0.306
0.283
0.890
TYPEPROD
-0.181*
0.036
0.186
-0.031
-0.069
Sig.
0.071
0.804
0.201
0.834
0.639
NUMPROD
0.103
-0.016
-0.196
0.215
0.160
Sig.
0.305
0.912
0.178
0.137
0.271
NUMB RAN
0.059
-0:148
0.204
-0.064
-0.148
Sig.
0.560
0.319
0.170
0.667
0.319
OWNLABEL
-0.025
-0.045
-0.247
-0.044
0.112
Sig.
0.813
0.768
0.102
0.772
0.463
4BUYER
-0.071
-0.112
0.175
0.013
-0.115
Sig.
0.517
0.480
0.266
0.935
0.469
R&DEXP
0.231 **
0.558***
0.191
-0.034
0.036
Sig.
0.000
0.238
0.837
0.828
0.044
MARKET
0.032
0.198
0.264
-0.070
-0.036
Sig.
0.778
0.220
0.100
0.666
0.827
LOCCOMP
-0.347***
-0.055
0.185
-0.151
-0.176
Sig.
0.002
0.751
0.281
0.380
0.305
REGCOMP
0.063
-0.186
-0.169
-0.139
0.186
Sig.
0.595
0.278
0.324
0.419
0.277
DOMCOMP
0.165
0.134
-0.133
0.398**
0.081
Sig.
0.160
0.437
0.441
0.016
0.641
FORCOMP
0.250**
0.097
0.118
-0.129
-0.089
Sig.
0.032
0.574
0.493
0.452
0.606
Exper. for.act.
0.228**
0.237
-0.125
0.142
0.268*
Sig.
0.022
0.101
0.393
0.331
0.062
Interest f.acti
0.545***
0.076
0.118
-0.250*
0.086'
Sig.
0.000
0.603
0.421
0.083
0.556
I
I
I
I
Current expor
0.356**
Sig.
0.011
Intermit expo
0.157
-0.026
0.033
-0.413**
0.239
Sig.
0.288
0.891
0.861
0.023
0.203
Intermt/seaso
0.154
0.083
0.070
-0.302
0.126
Sig.
0.296
0.664
0.712
0.104
0.508
Current wareh
-0.181
0.114
0.185
-0.194
0.217
Sig.
0.209
0.550
0.249
0.327
0.303
Current FD I
-0.225
-0.073
0.093
0.162
-0.083
Sig.
0.702
0.626
0.391
0.663
0.117
Current co-pk
-0.274*
-0.092
0.139
0.245
-0.124
Sig.
0.057
0.633
0.472
0.200
0.521
I
I
I
Current licen
-0.377***
I
Sig.
0.007
Source abroad
0.035
0.342**
0.126
0.210
0.038
NOTE:
I no mesure of association was computed because at least one variable is a constant
Sig.
0.736
0.017
0.392
0.152
0.798
Need for
strategic
alliances
-0.014
0.888
0.024
0.815
-0.214**
0.033
-0.198**
0.048
-0.056
0.581
-0.159
0.117
0.010
0.925
-0.093
0.397
0.100
0.385
0.041
0.718
-0.151
0.202
-0.102
0.389
0.141
0.235
0.152
0.199
0.107
0.291
0.223**
0.026
0.262*
0.060
0.081
0.578
0.000
1.000
0.118
0.406
0.078
0.583
-0.099
0.488
0.011
0.938
0.225**
0.026
59
APPENDIX 15. C
Barrier: lack of
information
Sig.
Barrier: lack of
time
Sig.
Barrier: price
competition
Sig.
Barrier: tariff
barriers
Sig.
Barrier: other
foreign tariffs
Sig.
Barrier: train/srv
inability
Sig.
Barrier: small
size
Sig.
Barrier: other
barriers
Sig.
Threatened by
foreign competit
Sig.
Increase in
foreign takeover
Sig.
Lower foreign
cost of business
Sig.
More advanced
foreign tech.
Sig.
Local exporters
more competitive
Sig.
Other reasons of
threat
Sig.
Need for stratigic
alliances
Sig.
dB
d Th
Need to be
more active
in foreign
market
0.291 ***
Local
exporters are
more
competitive
0.317**
Opportunities
abroad
Forced by
increasingly
global markets
Other reasons
of need for
foreign activity
Need for
strategic
alliances
0.194
0.022
-0.047
0.125
0.004
0.123
0.026
0.375***
0.181
0.238*
0.882
0.026
0.749
0.008
0.221
0.232**
0.227
0.052
0.008
0.168
0.099
-0.027
0.861
-0.142
0.954
0.223
0.021
0.102
0.607
0.076
0.250
-0.084
0.853
-0.328**
0.331
0.277*
0:123
0.147
0.320
0.049
0.453
-0.006
0.565
0.141
0.021
-0.210
0.054
0.258*
0.314
0.235
0.635
0.066
0.950
0.057
0.332
0.315**
0.148 .
0.091
0.073
0.202
0.105
-0.070
0.519
-0.034
0.574
-0.243**
0.027
0.197
0.175
0.533
0.105
0.164
0.038
0.635
-0.020
0.738
0.000
0.796
-0. 168
0.893
0.014
1.000
-0.120
I.
ble for Needs ofF
A ..
0.015
-0.103
-0.141
0.4 71
0.067
0.312
0.184 *
0.332
0.323**
0.648
-0.009
0.249
0.346**
0.923
-0.059
0.239
0.103
0.068
0.240
0.027
0.225
0.955
0.395
0.017
0.507*
0.693
-0.267
0.312
-0.290
0.337
-0.385
0.459
0.058
0.182
0.101
0.077
-0.433
0.377
0.228
0.259
0.167
0.115
0.150
0.851
0.527*
0.742
0.123
0.139
0.158
0.453
-0.083
0.521
..0.265
0.551
0.227
0.064
0.133
0.689 '
0.234
0.606
0.300
0.787
-0.158
0.304
-0.182
0.265
0.385
0.664
-0.058
0.443
-0.101
0.319
0.058
0.606
-0.228
0.485
-0.426*
0.115
0.447***
0.851
-0.073
0.742
-0.124
0.851
0.104
0.453
0.130
0.088
1.000
0.000
0.624
0.407
0.485
0.384
I
.I
,. ... -- ..
60
APPENDIX 16. Parameter description for the categorical variables used in the logistic
regression models.
Value
Frequency
Model I & 2
Frequency
ModelS
1
2
3
4
18
21
27
9
13
12
22
6
0
1
0
0
TYPEPROD
Perishable goods
Non-perishable goods
0
1
23
52
16
37
0
1
NUMPROD
F ewer than 10
10 to 99
100 or more
1
2
3
28
33
24
15
20
18
0
1
0
1
2
59
16
44
9
0
1
Variable
Parameter coding
TOTSALE
Fewer than $1 million
$1 to $9.9 million
$10 to $99.9 million
$100 to $499.9 million
NUMB RAND
F ewer than 10
10 or more
0
0
1
0
0
0
0
1
0
0
1
~
-;,
-J
APPENDIX 17. CROSS-TABULATION TABLES
1. FIRM CHARACTERISTICS
1.1. STATE
NEWYORK
PENNSYL VANIA
COUNT
PERCENT
COUNT
PERCENT
<1
18
64.3%
10
35.7%
SIGNIFICANCE I
TOTAL SALES (million dollars)
1-9.9
10 - 99.9
100 - 499.9
25
15
5
71.4%
41.7%
35.7%
10
21
9
28.6%
58.3%
64.3%
9.487; 3; 0.023
Pearson chi-:square; degrees of freedom; asymptotic significance
<1
23
63.9%
13
36.1%
TOTAL ASSETS (million dollars)
1-9.9
10 - 99.9
100 - 499.9
25
10
3
71.4%
37.0%
60.0%
10
17
2
28.6%
63.0%
40.0%
7.988; 3' 0.046
0'\
1.2. TOTAL SALES (million dollars)
<1
1-9.9
10 - 99.9
100 - 499.9
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
SIGNIFICANCE I
TOTAL ASSETS (million dollars)
<1
1-9.9
10 - 99.9 100 - 499.9
26
1
72.2%
2.9%
9
21
1
25.0%
61.8%
3.7%
12
18
1
35.3%
66.7%
20.0%
1
8
4
2.8%
29.6%
80.0%
117.253; 9; 0.000
Pearson chi-square; degrees of freedom; asymptotic significance
PRODUCT TYPE
PERISHABLE
NON-PERISHABLE
2
26
6.9%
31.0%
7
28
24.1%
33.3%
13
23
44.8%
27.4%
7
7
24.1%
8.3%
12.029; 3' 0.007
NUMBER OF PRODUCTS
< 10
10 - 99
>= 100
17
8
3
45.9%
19.0%
8.8%
11
17
7
29.7%
40.5%
20.6%
8
11
17
21.6%
26.2%
50.0%
1
6
7
2.7%
14.3%
20.6%
23.089; 6; 0.001
1.3. TOTAL ASSETS (million dollars)
PRODUCT TYPE
PERISHABLE
NON-PERISHABLE
<1
COUNT
5
31
PERCENT
18.5%
40.8%
1-9.9
COUNT
9
26
PERCENT
33.3%
34.2%
10 - 99.9
COUNT
10
17
PERCENT
37.0%
22.4%
100-499.9
COUNT
3
2
PERCENT
11.1%
2.6%
SIGNIFICANCE'
7.418;
3;
0.060
Pearson chi-square; degrees of freedom; asymptotic significance
NUMBER OF PRODUCTS
< 10
20
60.6%
7
21.2%
6
18.2%
10 - 99
12
29.3%
19
46.3%
9
22.0%
1
2.4%
24.317; 6; 0.000
>= 100
4
13.8%
9
31.0%
12
41.4%
4
13.8%
0\
N
<1
1- 9.9
10 - 99.9
100 - 499.9
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
Meat products
2
11.1%
5
27.8%
9
50.0%
2
11.1%
Dairy products
2
50.0%
1
25.0%
1
25.0%
SIGNIFICANCE
Pearson chi-square;I degrees of freedom; asymptotic significance
SIC IDENTIFICATION CODE GROUP
Fruits/vee:etab1
Mill products
Sue:ar products
9
4
6
31.0%
50.0%
35.3%
14
4
4
48.3%
50.0%
23.5%
5
6
17.2%
35.3%
1
1
3.4%
5.9%
24.918; 18; 0.127
Fats & oils
1
50.0%
1
50.0%
Miscellaneous
12
48.0%
6
24.0%
7
28.0%
O' _..~
<o""",'o-~'I"'-'__,,,-_~-,--,,,,_~,,,,,'_."~'""'""'_"~'~~~'_ _, .............................. '""":'"__
1.4. PRODUCT TYPE
PERISHABEL
NON-PERISHABLE
NUMBER OF PRODUCTS
1 0 TO 99
16
35.6%
29
64.4%
11.858; 2; 0.003
FEWER THAN 10
2 5.4% 35 94.6%
COUNT
PERCENT
COUNT
PERCENT
SIGNIFICANCE I .
100 OR MORE
12 35.3% 22
64.7%
Pearson chi-square; degrees of freedom; asymptotic significance
PERISHABEL
NON-PERISHABLE
COUNT
PERCENT
COUNT
PERCENT
Meat prod.
19
100.0%
Dairv produc
3
75.0%
1
25.0%
SIGNIFICANCE I
SIC IDENTIFICATION CODE GROUP
Fruits/ve!!eta
Mill products
Sue:ar produ
6
18.8%
26
8
20
81.3%
100.0%
100.0%
76.905; 6; 0.000
Fats & oils
2
100.0%
Miscellaneous
2
6.5%
29
93.5%
I Pearson chi-square; degrees of freedom; asymptotic significance
2. FOREIGN ACTIVITY EXPERIENCE
NO
YES
COUNT
PERCENT
COUNT
PERCENT
SIGNIFICANCE I
<1
23
82.1 %
5
17.9%
TOT AL SALES (million dollars)
1-9.9
10 - 99.9
100 - 499.9
17
20
1
48.6%
55.6%
7.1%
18
16
13
51.4%
44.4%
92.9%
21.751; 3; 0.000
I Pearson chi-square; degrees of freedom; asymptotic significance
NUMBER OF PRODUCTS
< 10
> 100
10 - 99
26
21
14
70.3%
46.7%
41.2%
11
24
20
29.7%
53.3%
58.8%
7.048; 2; 0.029
INTEREST IN F.A.
NO
YES
38
23
88.4%
31.5%
5
50
11.6%
68.5%
35.095; 1; O.OOOH
0\ W
NO
YES
COUNT
PERCENT
COUNT
PERCENT
Meat products
9
47.4%
10
52.6%
Dairy products
2
50.0%
2
50.0%
SIGNIFICANCE
I
Pearson chi-square; degrees of freedom; asymptotic significance
SIC IDENTIFICATION CODE GROUP
Fruits/vel!etabl
Mill products
SUl!ar products
18
4
9
56.3%
50.0%
45.0%
14
4
11
43.8%
50.0%
55.0%
1.252; 6; 0.974
Fats & oils
1
50.0%
1
50.0%
Miscellaneous
18
58.1%
13
41.9%
3. FOREIGN ACTIVITY INTEREST
STATE
NEW YORK
PENNSYL VANIA
NO
COUNT
31
12
PERCENT
47.7%
23.5%
YES
COUNT
34
39
PERCENT
52.3%
76.5%
SIGNIFICANCE'
7.152; 1;significance
0.007
Pearson chi-square; degrees of freedom; asymptotic
NYY
7
63.6%
4
36.4%
TOTAL SALES (million dollars)
<1
1- 9.9 10 - 99.9 100 - 499.9
NO
COUNT
15
13
13
2
PERCENT
53.6% 37.1%
36.1%
14.3%
YES
COUNT
13
22
23
12
PERCENT
46.4% 62.9%
63.9%
85.7%
SIGNIFICANCEl
6.285; 3; 0.099
T Pearson chi-square; degrees of freedom; asymptotic significance
PRODUCT TYPE
PERISHABLE
NON-PERISHABLE
8
35
26.7%
40.7%
22
51
73.3%
59.3%
1.877; 1; 0.171
,~, QiII
GROUP SURVEYED
NYZ
NYL
PA
7
9
12
36.8% 56.3%
23.5%
12
7
39
63.2% 43.8%
76.5%
10.066; 4; 0.039
CNY
8
42.1%
11
57.9%
NUMBER BRANDS
< 10
>= 10
36
7
39.1%
33.3%
56
14
60.9%
66.7%
0.244; 1; 0.622
NUMBER OF PRODUCTS
< 10
10 - 99
>= 100
15
14
14
40.5%
31.1%
41.2%
22
31
20
59.5%
68.9%
58.8%
1.122; 2; 0.571
0\ ~
NO
YES
COUNT
PERCENT
COUNT
PERCENT
Meat products
6
31.6%
13
68.4%
Dairv products
1
25.0%
3
75.0%
SIGNIFICANCE
1
Pearson chi-square; degrees of freedom; asymptotic significance
SIC IDENTIFICATION CODE GROUP
Fruits/ve!!etabl
Mill prod ucts
Su!!ar products
9
1
7
28.1%
12.5%
35.0%
23
7
13
71.9%
87.5%
65.0%
9.701; 6; 0.138
Fats & oils
1
50.0%
1
50.0%
Miscellaneous
18
58.1%
13
41.9%
4. FOREIGN MARKET ENTRY MODES
4.1. EXPORTING
<1
NO
NO, DONE
IT BEFORE
YES
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
5
- 100.0%
TOTAL SALES million dollars)
1-9.9
10 - 99.9
1
5.6%
2
1
11.1%
6.3%
15
15
83.3%
93.8%
3.555; 6; 0.737
SIGNIFICANCE
I
T Pearson chi-square; degrees of freedom; asymptotic significance.
100 - 499.9
1
7.7%
12
92.3%
FOREIGN ACTIVITY INTEREST
NO
YES
1
1
20%
2.0%
1
2
20.0%
4.0%
3
47
60.0%
94.0%
6.761; 2; 0.034
4.2. INTERMITENT EXPORTING
<1
NO
YES
COUNT
PERCENT
COUNT
PERCENT
SIGNIFICANCE I
5
100.0%
TOTAL SALES (million dollars)
1-9.9
10 - 99.9
8
10
47.1 %
62.5%
9
6
52.9%
37.5%
10.828; 3; 0.013
Pearson chi-square; degrees of freedom; asymptotic significance
100 - 499.9
10
83.3%
2
16.7%
NUMBER OF PRODUCTS
FEWER THAN 10
100 OR MORE
10 - 99
4
13
13
36.4
56.5%
68.4%
7
10
6
63.6%
43.5%
31.6%
2.915; 2: 0.233
0\
V>
4.3. INTERMITENT I SEASONAL I DEMAND-ORIENTED EXPORTING
NOT
INTERMIT.
SEASONAL
/CYCLICAL
INTERMIT.
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
SIGNIFICANCE I
<1
2
40.0%
2
40.0%
1
20.0%
TOTAL SALES million dollars)
1-9.9
10 - 99.9
100 -499.9
9
II
10
52.9%
68.8%
83.3%
5
3
1
29.4%
18.8%
8.3%
3
2
1
17.6%
12.5%
8.3%
4.380; 6; 0.625
Pearson chi-square; degrees of freedom; asymptotic significance.
NUMBER OF PRODUCTS
< 10
10 - 99
> = 100
5
14
15
45.5%
60.9%
78.9%
4
6
2
36.4%
26.1%
10.5%
2
3
2
18.2%
13.0%
10.5%
3.863; 4; 0.425
NUMBER OF BRANDS
< 10
>= 10
28
5
68.3%
55.6%
10
24.4%
3
4
7.3%
44.4%
9.643; 2; 0.008
4.4. FOREIGN WAREHOUSES OR SALES OFFICIES
STATE
NEW YORK PENNSYLVANIA
NO
COUNT
20
23
PERCENT
69.0%
88.5%
NO, DONE
COUNT
1
1
IT BEFORE
PERCENT
3.4%
3.8%
YES
COUNT
8
2
PERCENT
27.6%
7.7%
3.657;
2;
0.161
SIGNIFICANCE
I
T Pearson chi-square; degrees of freedom; asymptotic significance.
NO
NO, DONE
IT BEFORE
YES
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
SIGNIFICANCE I
Meat products
7
70.0%
Dairy product
2
100.0%
3
30.0%
T Pearson chi-square; degrees of freedom; asymptotic significance
.. ./... ...
.......,"
,,: . ..'''''~''--'
------
r
.
TOTAL SALES (million dollars)
<1
1- 9.9
10 - 99.9 100 - 499.9
4
14
12
11
80.0%
77.8%
75.0%
84.6%
1
1
20.0%
5.6%
3
4
2
16.7%
25.0%
15.4%
6.177; 6; 0.404
SIC IDENTIFICATION CODE GROUP
Fruits/vel!etab
Mill products
Suar product
12
2
11
85.7%
50.0%
100.0%
2
50.0%
2
14.3%
34.505; 12; 0.001
NUMBER OF PRODUCTS
< 10
10 - 99
> = 100
11
18
14
100.0%
75.0%
70.0%
1
1
4.2%
5.0%
5
5
20.8%
25.0%
3.997; 4; 0.406
Fats & oils
1
100.0%
Miscellaneous
8
61.5%
5
38.5%
0\
0\
-- - .. .
,,';'".._,>«~"
..,...
4.5. OWNERSHIP INTERESTS
STATE
NEW YORK
PENNSYLVANIA
24
26
82.8%
100.0%
5
17.2%
4.931; 1; 0.026
NO
COUNT
PERCENT
YES
COUNT
PERCENT
SIGNIFICANCE I.
-re
<1
5
100.0%
TOTAL SALES million dollars)
1- 9.9
10 - 99.9
17
15
94.4%
93.8%
1
1
5.6%
6.3%
0.403; 3; 0.940
100 - 499.9
12
92.3%
1
7.7%
Pearson chi-square; degrees of freedom; asymptotic significance
4.6. CO-P ACKlNG
NO
YES
STATE
NEW YORK
PENNSYLVANIA
21
25
75.0%
96.2%
7
1
25.0%
3.8%
4.780; 1; 0.029
COUNT
PERCENT
COUNT
PERCENT
SIGNIFICANCE 1
<1
5
100.0%
TOTAL SALES (million dollars)
1-9.9
10 - 99.9 100 - 499.9
15
13
12
88.2%
81.3%
92.3%
2
3
1
11.8%
18.8%
7.7%
1.626; 3; 0.653
NUMBER OF PRODUCTS
< 10
10 - 99
> = 100
11
20
15
100.0%
87.0%
75.0%
3
5
13.0%
25.0%
3.614; 2; 0.164
I Pearson chi-square; degrees of freeoom; asymptotic significance
4.7. LICENSING
NO
YES
COUNT
PERCENT
COUNT
PERCENT
<1
5
100.0%
SIGNIFICANCE I
I Pearson chi-square; degrees of freedom; asymptotic significance
TOTAL SALES million dollars)
1- 9.9
10 - 99.9
17
16
94.4%
100.0%
1
5.6%
3.498; 3; 0.321
100 - 499.9
11
84.6%
2
15.4%
0\
-J
5. ENTRY MODES INTEREST
5.1. INTEREST IN INDIRECT EXPORT
NOT
INTERESTED
NOT
Considered
SOME
INTEREST
VERY
INTERESTED
SIGNIFICANCE
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
STATE
NY
PA
5
4
15.2% 10.8%
2
3
6.1%
8.1%
15
7
45.5% 18.9%
11
23
33.3% 62.2%
7.251; 3; 0.064
NUMBER OF BRANDS
< 10
>= 10
4
5
7.1%
38.5%
5
8.9%
19
2
33.9%
15.4%
28
6
50.0%
46.2%
10.319; 3; 0.016
T Pearson chi-square; degrees of freedom; asymptotic significance
INTEREST FOREIGN ACTIVITY
NO
YES
1
8
25.0%
12.1%
1
4
25.0%
6.1%
2
20
50.0%
30.3%
34
51.5%
4.907; 3; 0.179
CURRENT EXPORT ACTIVITY
NO
NO, DONE
YES
2
6
100.0%
13.6%
3
6.8%
2
15
100.0%
34.1%
20
45.5%
14.086; 6; 0.029
5.2. INTEREST IN DIRECT EXPORT
NOT
INTERESTED
NOT
CONSIDERED
SOME
INTEREST
VERY
INTERESTED
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
STATE
NY
PA
6
1
18.2%
2.4%
2
3
6.1%
7.3%
10
11
30.3% 26.8%
15
26
45.5% 63.4%
EXPERIENCE FOREIGN ACT!.
NO
YES
1
6
4.5%
11.5%
3
2
13.6%
3.8%
10
11
45.5%
21.2%
8
33
36.4%
63.5%
SIGNIFICANC
5.975;
3; 0.113significance
Pearson chi-square; degrees of freedom;
asymptotic
EI
,
1iIIIIIIe:'.=.',.::;.~' .j!:,' ................ ;s-;~';:.-,
8.258; 3; 0.041
INTEREST FOR. ACT.
NO
YES
2
5
50.0%
7.1%
1
4
25.0%
5.7%
1
20
25.0%
28.6%
41
58.6%
CURRENT EXPORT ACTIVITY
NO
NO, DONE
YES
2
1
3
100.0%
50.0%
6.3%
2
4.2%
1
10
50.0%
20.8%
33
68.8%
11.790; 3; 0.008
21.420; 6; 0.002
0\
00
5.3. INTEREST IN WAREHOUSES AND SALES OFFICES ABROAD
NOT
INTERESTED
NOT
CONSIDERED
SOME
INTEREST
VERY
INTERESTED
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
PRODUCT
PERISHABLE
NON-PERISHABLE
12
28
66.7%
56.0%
1
15
5.6%
30.0%
4
1
22.2%
2.0%
1
6
5.6%
12.0%
SIGNIFICANC
11.512'
3; 0.009
chi-square; degrees of freedom; asymptotic
significance
E Pearson
I
CURRENT WAREHOUSE ACTIVITY
NO
NO, DONE
YES
24
2
2
68.6%
100.0%
20.0%
8
22.9%
1
4
2.9%
40.0%
2
4
5.7%
40.0%
CURRENT CO-PACK ACTIV
NO
YES
25
3
65.8%
37.5%
8
21.1%
3
2
7.9%
25.0%
2
3
5.3%
37.5%
24.133; 6; 0.000
10.650; 3; 0.014
0\
\0
NOT
INTERESTED
NOT
CONSIDERED
SOME
INTEREST
VERY
INTERESTED
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
Meat products
7
70.0%
Dairv product
3
100.0%
2
20.0%
1
10.0%
SIGNIFICANC
chi-square; degrees of freedom; asymptotic significance
I
EPearson
SIC IDENTIFICATION CODE GROUP
Fruits/vel!:etab
Mill products
SUl!:ar product
11
4
7
55.0%
50.0%
63.6%
7
4
3
35.0%
50.0%
27.3%
1
1
5.0%
9.1%
1
5.0%
23.375; 18; 0.177
Fats & oils
1
100.0%
Miscellaneous
7
46.7%
2
13.3%
1
6.7%
5
33.3%
5.4. INTEREST IN MINORITY OWNERSHIP INTERESTS ABROAD
NOT
INTERESTED
NOT
CONSIDERED
SOME
INTEREST
VERY
INTERESTED
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
EXPERIENCE IN FOREIGN ACTIVITY
NO
YES
10
30
47.6%
63.8%
10
8
47.6%
17.0%
1
7
4.8%
24.9%
2
4.3%
NO
24
66.7%
7
19.4%
4
11.1%
1
2.8%
CURRENT WAREHOUSE ACTIVITY
NO, DONE BEFORE
2
100.0%
SIGNIFICANC
7.942; 3; 0.047
Pearson chi-square; degrees of freedom; asymptotic significance
EI
YES
4
44.4%
1
11.1%
3
33.3%
1
11.1%
- 5.597; 6; 0.470
-.J
o
NOT
INTERESTED
NOT
CONSIDERED
SOME
INTEREST
-
VERY
INTERESTED
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
Meat products
9
90.0%
1
10.0%
Dairy product
2
66.7%
1
33.3%
SIC IDENTIFICATION CODE GROUP
Fruits/vel!.etab
Mill products
SUl!.ar product
11
4
6
52.4%
50.0%
54.5%
7
4
5
33.3%
50.0%
45.5%
3
14.3%
COUNT
PERCENT
SIGNIFICANC
Pearson chi-square; degrees of freedom; asymptotic significance
EI
....
.,-.
Fats & oils
1
Miscellaneous
8
57.1%
1
7.1%
3
100.0%
21.4%
2
14.3%
30.326; 18; 0.034
.-.,..,.
~ -.
5.5. INTEREST IN MAJORITY OWNERSHIP ABROAD
NOT
INTERESTED
NOT
CONSIDERED
SOME
INTEREST
VERY
INTERESTED
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
EXPERIENCE IN FOREIGN ACTIVITY
NO
YES
12
32
57.1 %
69.6%
8
6
38.1%
13.0%
1
2
4.8%
4.3%
6
13.0%
NO
25
73.5%
5
14.7%
1
2.9%
3
8.8%
CURRENT WAREHOUSE ACTIVITY
NO, DONE BEFORE
2
100.0%
SIGNIFICANC
7.414; 3; 0.060
chi-square; degrees of freedom; asymptotic significance
E Pearson
I
YES
5
50.0%
1
10.0%
1
10.0%
3
30.0%
5.203; 6; 0.518
-.J
NOT
INTERESTED
NOT
CONSIDERED
SOME
INTEREST
VERY
INTERESTED
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
Meat products
9
90.0%
1
10.0%
Dairv oroduct
2
66.7%
1
33.3%
SIGNIFICANC
E IPearson chi-square; degrees of freedom; asymptotic significance
SIC IDENTIFICATION CODE GROUP
Fruits/vel!etab Mill products
Sugar product
12
4
8
60.0%
50.0%
66.7%
6
4
3
30.0%
50.0%
25.0%
1
5.0%
1
1
5.0%
8.3%
24.965; 15; 0.050
Fats & oils
Miscellaneous
9
64.3%
1
7.1%
4
28.6%
5.6. INTEREST IN COPACKING
NOT
INTERESTED
NOT
CONSIDERED
SOME
INTEREST
VERY
INTERESTED
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
TOTAL SALES (million dollars)
<1
1-9.9
10 - 99.9 100 - 499.9
2
9
7
8
16.7% 39.1%
31.8%
72.7%
5
3
1
21.7%
13.6%
9.1%
5
6
9
1
41.7% 26.1%
40.9%
9.1%
5
3
3
1
41.7% 13.0%
13.6%
9.1%
SIGNIFICANC
3; 0.078
T Pearson chi-square; degrees of freedom; asymptotic16.002;
significance
EI
NUMBER OF PRODUCTS
< 10
10 - 99
> = 100
3
13
11
16.7%
41.9%
50.0%
2
5
2
11.1%
16.1%
9.1%
9
6
6
50.0%
19.4%
27.3%
4
7
3
22.2%
22.6%
13.6%
EXPERIENCE FOREIGN ACTIVITY
NO
YES
4
23
18.2%
46.9%
4
5
18.2%
10.2%
10
11
45.5%
22.4%
4
10
18.2%
20.4%
7.935; 6; 0.243
6.819; 3; 0.078
..!
N
NOT
INTERESTED
NOT
CONSIDERED
SOME
INTEREST
VERY
INTERESTED
SIGNIFICANCE
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
NO
20
54.1%
5
13.5%
7
18.9%
5
13.5%
CURRENT WAREHOUSE ACTIVITY
NO, DONE BEFORE
1
50.0%
T Pearson chi-square; degrees of freedom; asymptotic significance
1
50.0%
9.198; 6; 0.163
YES
2
20.0%
4
40.0%
4
40.0%
CURRENT COP ACKING ACTIVITY
NO
YES
21
2
52.5%
25.0%
4
1
10.0%
12.5%
9
1
22.5%
12.5%
6
4
15.0%
50.0%
5.332; 3; 0.149
, , ....-
,.
"'
5.7. INTEREST IN LICENSING
NOT
INTERESTED
NOT
CONSIDERED
SOME
INTEREST
VERY
INTERESTED
SIGNIFICANCEl
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
COUNT
PERCENT
<1
2
16.7%
2
16.7%
5
41.7%
3
25.0%
TOTAL SALES (million dollars)
1- 9.9
10 - 99.9
10
8
47.6%
40.0%
8
6
38.1%
30.0%
2
6
9.5%
30.0%
1
4.8%
17.897; 9; 0.036
I Pearson chi-square; degrees of freedom; asymptotic significance
100 - 499.9
6
54.5%
1
9.1%
4
36.4%
< 10
4
23.5%
5
29.4%
7
41.2%
1
5.9%
NUMBER OF PRODUCTS
10 - 99
11
37.9%
6
20.7%
7
24.1%
5
17.2%
10.141; 6; 0.119
> = 100
12
57.1%
6
28.6%
3
14.3%
6. FOREIGN MARKET ENTRY BARRIERS
-.J
VJ
6.1. LACK OF INFORMATION
NO
YES
COUNT
PERCENT
COUNT
PERCENT
SIGNIFICANCE I
EXPERIENCE F.A.
NO
YES
32
38
58.2%
74.5%
23
13
41.8%
25.5%
3.146; 1; 0.076
INTEREST F.A.
NO
YES
29
41
80.6%
58.6%
7
29
19.4%
41.4%
5.123; 1; 0.024
Pearson chi-square; degrees of freedom; asymptotic significance
INTERMITENT EXPORTER
NO
SEASONAL
YES
25
8
3
80.6%
66.7%
50.0%
6
4
3
19.4%
33.3%
50.0%
2.799; 2; 0.247
CURRENT COP ACKING
NO
YES
30
8
71.4%
100.0%
12
28.6%
3.008; l' 0.083
6.2. TIME
NO
YES
NUMBER OF BRANDS
< 10
10 OR MORE
56
16
65.1%
88.9%
30
2
34.9%
11.1%
3.949; 1; 0.047
COUNT
PERCENT
COUNT
PERCENT
INTEREST IN FOREIGN ACTIVITY
NO
YES
29
43
80.6%
61.4%
7
27
19.4%
38.6%
3.992; 1; 0.046
SIGNIFICANCE
I
Pearson chi-square; degrees of freedom; asymptotic significance.
SOURCE RAW MAT. ABROAD
NO
YES
43
25
75.4%
59.5%
14
17
24.6%
40.5%
2.848; 1; 0.092
6.3. PRICE COMPETITION
PRODUCT
PERISHABLE
NO
YES
COUNT 10
PERCENT 40.0%
I COUNT
PERCENT 60.0%
SIGNIFICANCE I
NON-PERISHABLE
51
63.0%
30
37.0%
15
EXPER1ENCE IN FOREIGN ACTIVITY
NO YES 37 24 67.3% 47.1% 18 27 32.7%
52.9% 4.426; 1; 0.035
-.J
.j:
>.
4.123; 1; 0.042
Pearson chi-square; degrees of freedom; asymptotic significance.
6.4. TARIFF BARRIERS
NO
YES
COUNT
PERCENT
COUNT
PERCENT
<1
23
92.0%
2
8.0%
SIGNIFICANCE I
TOTAL SALES (million dollars)
1-9.9
10 - 99.9
100 - 499.9
22
18
5
68.8%
52.9%
41.7%
10
16
7
31.3%
47.1%
58.3%
13.393; 3; 0.004
T Pearson chi-square; degrees of freedom; asymptotic significance
....
r
~
NUMBER OF PRODUCTS
< 10
10 - 99
> = 100
27
29
13
79.4%
67.4%
44.8%
7
14
16
20.6%
32.6%
55.2%
8.414; 2; 0.015
EXPERIENCE FOREIGN ACTIVITY
NO
YES
49
20
89.1%
39.2%
6
31
10.9%
60.8%
28.971; 1; 0.000
.
1IQI -
~ .................~
NO
YES
COUNT
PERCENT
COUNT
PERCENT
SIGNIFICANCE I
I
-
_......... '
"1
INTEREST FOREIGN ACTIVITY
NO
YES
28
41
77.8%
58.6%
8
29
22.2%
41.4%
3.860; 1; 0.049
Pearson chi-square; degrees of freedom; asymptotic significance.
INTERMITENT EXPORTER
NO
YES
6
12
22.2%
54.5%
21
10
77.8%
45.5%
5.450; 1; 0.020
INTERMITENT I SEASONAL EXPORTER
NO
SEASONAL
YES
7
6
5
22.6%
50.0%
83.3%
24
6
1
77.4%
50.0%
16.7%
9.187; 2; 0.010
6.5. OTHER REGULATIONS BY FOREIGN GOVERNMENTS
NO
YES
COUNT
PERCENT
COUNT
PERCENT
SIGNIFICANCE I
<1
22
88.0%
3
12.0%
TOT AL SALES 'million dollars)
1-9.9
10 - 99.9
20
27
62.5%
79.4%
12
7
37.5%
20.6%
10.972; 3; 0.012
100 - 499.9
5
41.7%
7
58.3%
1 Pearson chi-square; degrees of freedom; asymptotic significance
EXPERIENCE IN FOREIGN ACTIVITY
NO
YES
45
32
81.8%
62.7%
10
19
18.2%
37.3%
4.844; 1; 0.028
6.6. TRAINING AND SERVICE INABILITY
NO
YES
COUNT
PERCENT
COUNT
PERCENT
SIGNIFICANCE I
PRODUCT CATEGORY
PERISHABLE
NON-PERISHABLE
23
80
92.0%
98.8%
2
1
8.0%
1.2%
3.180; 1; 0.075
I Pearson chi-square; degrees of freedom; asymptotic significance
NO
39
100.0%
CURRENT WAREHOUSE ACTIVITY
NO, DONE IN PAST
2
100.0%
4.182; 2; 0.124
YES
9
90.0%
1
10.0%
-.J
U>
6.7. SMALL COMPANY SIZE
TOTAL SALES million dollars)
10 - 99.9
1 - 9.9
NO
COUNT
13
19
23
PERCENT
52.0%
59.4%
67.6%
YES
COUNT
12
I3
II
PERCENT
48.0%
40.6%
32.4%
6.048; 3; O. I 09
Pearson chi-square;I degrees of freedom; asymptotic significance
SIGNIFICANCE
<I
NO
I COUNT
YES
l COUNT
PERCENT
PERCENT
EXPERIENCE IN FOREIGN ACTIVITY
NO YES
29
40
52.7%
78.4%
26'
II
47.3%
21.6%
SIGNIFICANCE I
7.695; I; 0.006
NUMBER OF PRODUCTS
100 - 499.9
< 10
II
91.7%
I
8.3%
19
55.9%
15
44.1%
10
- 99
> = 100
28
65.1%
15
34.9%
2.750; 2; 0.253
22
75.9%
7
24.1%
INTEREST IN FOREIGN ACTIVITY
N~ ~S
18 51
50.0% 72.9%
18 19
50.0% 27.1%
5.466; 1; 0.019
Pearson chi-square; degrees of freedom; asymptotic significance.
6.8. OTHER BARRIERS OF ENTRY
EXPERIENCE F.Az
NO
YES
EXPORT ACTIVITy3
OWNERSHIP}
COPACKING3
NO
NO,
S
NO
S
NO
S
DONE
NO
COUNT
47
36
I
35
35
I
32
3
PERCENT
85.5%
70.6%
50.0%
74.5%
76.1%
20.0%
76.2%
37.5%
YES
COUNT
8
15
2
I
12
II
4
10
5
PERCENT
14.5%
29.4%
100.0%
50.0%
25.5%
23.9%
80.0%
23.8%
62.5%
3.442; 1; 0.064
5.549; 2; 0.062
6.833; I; 0.009
4.790; I; 0.029
SIGNIFICANCE
Pearson chi-square; Idegrees of freedom; asymptotic significance. l Experience in foreign activity. ~ Current involvement in these entry modes.
LICENSING3
NO
YES
35
I
74.5%
25.0%
12
3
25.5%
75.0%
4.345; I; 0.037
-..I
0\
....
~~
...
.;
7. PERCEIVED IMPORTANCE OF GLOBAL COMPETITION
7.1. THREATENED BY FOREIGN COMPETITION
TOTAL SALES (million dollars)
EXPERIENCE F.A.2
INTEREST F.A.3
SOURCE ABROAD4
1- 9.9
10 - 99.9
100 - 499.9
No
Yes
No
Yes
No
Yes
NO
COUNT
26
30
7
50
35
33
52
50
31
PERCENT
78.8%
88.2%
58.3%
92.6%
68.6%
91.7%
75.4%
89.3%
72.1%
YES
COUNT
7
4
5
4
16
3
17
6
12
PERCENT
21.2%
11.8%
41. 7%
7.4%
31.4%
8.3%
24.6%
10.7%
27.9%
5.877; 3; 0.118
9.769; 1; 0.002
4.078; 1; 0.043
4.833; 1; 0.028
SIGNIFICANCE I
Pearson chi-square; degrees of freedom; asymptotic sig.nificance. < Experience in Foreign Activity. J Interest in Foreign Activity. ~ Source raw
,
.
<1
20
87.0%
3
13.0%
materials abroad.
7.1.1. INCREASING NUMBER OF FOREIGN FIRMS ARE TAKING AWAY THEIR BUSINESS
NO
YES
COUNT
PERCENT
COUNT
PERCENT
Meat products 2
100.0%
Dairv Products
SIC IDENTIFICATION CODE GROUP
Fruits/ve etabl
Mill roducts
Su ar roducts
7 2 77.8% 50.0% 2 I 2 22.2% 100.0% 50.0%
7.247; 4; 0.123
Fats & Oils
Miscellaneous
1 Pearson chi-square; degrees of freedom; asymptotic
significance
7.1.2. FOREIGN FIRMS HAVE MORE ADVANCE TECHNOLOGY
PRODUCT TYPE
YES
COUNT
PERCENT
COUNT
PERCENT
I
2
100.0%
SIGNIFICANCE I
NO
I
NON-PERISHABLE PRODUCTS
14 100.0%
PERISHABLE PRODUCTS 3
75.0% 1 25.0%
SIGNIFICANCE I
I Pearson chi-square; degrees of freedom; asymptotic significance
3.706; 1; 0.054
7.1.3. LOCAL FIRMS ACTIVE IN FOREGN MARKETS ARE MORE COMPETITIVE
NUMBER OF BRANDS
FEWER THAN 10 PRODUCTS
COUNT
14 87.5% 2 12.5%
PERCENT
YES COUNT
PERCENT
SIGNIFICANCE
Pearson chi-square; degrees of freedom; asymptotic significance
10 OR MORE PRODUCTS
NO
1
100.0%
I
4.958; 1; 0.026
7.1.4. OTHER REASONS OF FOREIGN THREAT
NO
YES
COUNT
PERCENT
COUNT
PERCENT
SIGNIFICANCE
Pearson chi-square; degrees of freedom; asymptotic significance
FIRMS SOURCE RAW MATERIALS FROM ABROAD
NO YES
2 11
33.3% 91.7%
41
66.7% 8.3%
6.785; 1; 0.009
7.2. NEED TO BE ACTIVE IN FOREIGN MARKETS
STATE
PRODUCT TYPE
NY
PA
PERISHABLE
NON-PERISHABLE
NO
COUNT
32
18
8
42
PERCENT
58.2%
39.1%
33.3%
54.5%
YES COUNT
23
28
16
35
PERCENT
41.8%
60.9%
66.7%
45.5%
3.673; 1; 0.057
3.293; 1; 0.070
SIGNIFICANCE
Pearson chi-square; Idegrees of freedom; asymptotic significance
EXPERIENCE F.A
NO
YES
31
19
60.8%
38.0%
20
31
39.2%
62.0%
5.243; 1; 0.022
INTEREST F.A.
NO
YES
31
19
86.1%
29.2%
5
46
13.9%
70.8%
29.986; 1; 0.000
-.J
00
.-01
1
:~
.........
NO
YES
COUNT
PERCENT
COUNT
PERCENT
Meat products
6
40.0%
9
60.0%
Dairv Products
2
50.0%
2
50.0%
SIGNIFICANCE I
I Pearson chi-square; degrees of freedom; asymptotic significance
NO
YES
COUNT
PERCENT
COUNT
PERCENT
SIGNIFICANCE 1
SIC IDENTIFICATION CODE GROUP
Fruits/ve!?:etabl
Mill products
SU2ar products
12
3
6
42.9%
37.5%
42.1 %
16
5
11
57.1%
62.5%
57.9%
6.976; 6; 0.323
CURRENT EXPORT ACTIVITY INVOLVEMENT
NO
NO, DONE BEFORE
YES
2
2.
15
100.0%
100.0%
32.6%
31
67.4%
7.094; 2; 0.029
CURRENT COP ACKING
NO
YES
14
5
33.3%
71.4%
28
2
66.7%
28.6%
3.668; 1; 0.055
Fats & Oils
1
50.0%
1
50.0%
Miscellaneous
18
72.0%
7
28.0%
CURRENT LICENSING
NO
YES
15
4
32.6%
100.0%
31
67.4%
7.094; 1; 0.008
I Pearson chi-square; degrees of freedom; asymptotic significance.
LACK OF lNFORMATION2
NO
YES
39
10
60.0%
29.4%
26
24
40.0%
70.6%
8.355; 1; 0.004
SMALL FIRM SIZE2
FOREIGN THREAT3
NEED ALLIANCES
NO
YES
NO
YES
NO
YES
NO
COUNT
27
22
44
6
38
9
PERCENT
40.9%
66.7%
55.0%
31.6%
67.9%
22.5%
YES
COUNT
39
11
36
13
18
31
PERCENT
59.1%
33.3%
45.0%
68.4%
32.1%
77.5%
5.839; 1; 0.016
3.369; 1; 0.066
SIGNIFICANCE I
19.210; 1; 0.000
Pearson chi-square; degrees of freedom; asymptotic significance. L Barriers of entry to foreign markets. ~ Firm feels threatened by foreign competitIOn.
--J
\0
7.2.1. LOCAL FIRMS ACTIVE IN FOREGN MARKETS ARE MORE COMPETITIVE (COMPETITIVE NEED)
SOURCE ABROAD2
LACK OF INFORMATIONJ
LACK OF TIME3
TRAINING INABILITy3
FOREIGN
THREAr
NO
YES
NO
YES
NO
YES
NO
YES
NO
YES
NO
COUNT
27
17
26
19
30
15
44
1
33
10
PERCENT
100.0%
81.0%
100.0%
82.6%
100.0%
78.9%
93.6%
50.0%
97.1%
76.9%
YES
COUNT
4
4
4
3
1
1
3
PERCENT
19.0%
17.4%
21.1%
6.4%
50.0%
2.9%
23.1%
1; 0.018
4.924; 1;
0.026sources raw materials
6.877; 1; from
0.009abroad. J Barriers
4.868;of1;entry
0.027to foreign markets.
4.897' 1; 0.027
SIGNIFICANCE
I degrees 5.610;
Pearson chi-square;
of freedom;
asymptotic significance.
L Firms
4 Firm feels threatened by foreign competition
7.2.2. NEED TO TAKE ADVANTAGE OF OPPORTUNITIES ABROAD
TOTAL SALES (million dollars
LACK OF TIME2
1- 9.9
10 - 99.9
100 - 499.9
NO
YES
NO
COUNT
2
2
3
7
1
PERCENT
15.4%
11.8%
37.5%
23.3%
5.3%
YES COUNT
10
11
15
5
23
18
PERCENT
100.0%
84.6%
88.2%
62.5%
76.7%
94.7%
5.195; 3; 0.158
2.780; 1; 0.095
SIGNIFICANCE I
Pearson chi-square; degrees of freedom; asymptotic significance. L Barriers of entry to foreign markets.
<1
TARIFF BARRIERS2
NO
YES
2
6
6.7%
31.6%
28
13
93.3%
68.4%
5.285; 1; 0.022
7.2.3. FORECED BY INCREASINGLY GLOBAL MARKETS
TOTAL SALES (million dollars
1- 9.9
10 - 99.9
100 - 499.9
NO
COUNT
3
9
2
PERCENT
23.1%
52.9%
25.0%
YES COUNT
10
8
6
PERCENT
76.9%
47.1%
75.0%
12.166; 3; 0.007
SIGNIFICANCE 1
Pearson chi-square; degrees of freedom; asymptotic significance. L Interest in foreign activity.
<1
9
90.0%
1
10.0%
STATE
NY
PA
6
18
28.6%
64.3%
15
10
71.4%
35.7%
6,125; 1; 0.013
INTEREST IN FOR. ACT.2
NO
YES
24
52.2%
3
22
100.0%
47.8%
3.068; 1; 0.080
00
o
I~
..
.........
......... ,.'"
,.-->::"..".,.~,>~
- -""1-r.
INTERMITENT
TARIFF BARRIERS2
EXPORTS
NO
YES
NO
YES
NO
COUNT
3
10
18
6
PERCENT
21.4%
62.5%
60.0%
31.6%
YES
COUNT
11
6
12
13
PERCENT
78.6%
37.5%
40.0%
68.4%
5.129; 1; 0.024
3.760; 1; 0.052
SIGNIFICANCE
Pearson chi-square;I degrees of freedom; asymptotic significance. /. Barriers of entry to
1
.
,,",,~-"..'.;,:.;y,_h" -.,'"". ~"'"..~"'...'__,...
OTHER FOREIGN THREA T4
REGULA TIONS23
NO
YES
NO
YES
20
4
21
3
57.1%
28.6%
61.8%
23.1%
15
10
13
10
42.9%
71.4%
38.2%
76.9%
3.267; 1; 0.071
5.633; 1; 0.018
foreign markets. ~ Other foreign regulations. 4 Firm
FOREIGN
TAKEOVERs
NO
YES
3
42.9%
4
6
57.1%
100.0%
3.343; 1; 0.067
feels threatened by foreign competition. 5 Increasing number of foreign firms are taking away their business
7.2.4. OTHER EXPLANATIONS FOR NEED TO ENTER FOREIGN MARKETS
FOREIGN ACTIVITY EXPERIENCE
NO
I
YES
25
83.3%
5
16.7%
NO 19
100.0%
COUNT
PERCENT
YES
I
COUNT
PERCENT SIGNIFICANCEI I Pearson chi-square;
degrees of freedom; asymptotic significance
00
.....
3.527; 1; 0.060
7.3. NEED STRATEGIC ALLIANCES
NO
COUNT
YES
PERCENT
COUNT
PERCENT
SIGNIFICANCE I
Meat products
7
Dairv Droducts
1
46.7%
8
53.3%
25.0%
3
75.0%
I Pearson chi-square; degrees of freedom; asymptotic significance
SIC IDENTIFICATION CODE GROUP
Mill Droducts
Suar products
Fruits/ve!!:etabl
13
48.1%
14
51.9%
4
50.0%
4
50.0%
6.676; 6; 0.352
13
72.2%
5
27.8%
Fats & oils
Miscellaneous
1
50.0%
1
50.0%
18
69.2%
8
30.8%
NO
YES
COUNT
PERCENT
COUNT
PERCENT
SIGNIFICANCE 1
PRODUCT TYPE
PERISHABLE
NON-PERISHABLE
10
47
40.0%
62.7%
15
28
60.0%
37.3%
3.930; 1; 0.047
INTEREST FOREIGN ACTIVITY
NO
YES
24
33
72.7%
49.3%
9
34 .
27.3%
50.7%
4.971; 1; 0.026
CURRENT EXPORT INVOLVEMENT
NO
NO, DONE BEFORE
YES
2
2
23
100.0%
100.0%
47.9%
25
52.1%
4.012; 2; 0.135
Pearson chi-square; degrees of freedom; asymptotic significance
SOURCE RAW MATERIALS ABROAD
NO
YES
36
19
66.7%
44.2%
YES
18
24
33.3%
55.8%
Pearson chi-square; Idegrees of freedom; asymptotic
significance.
4.928; 1; 0.026
SIGNIFICANCE
NO
COUNT
PERCENT
COUNT
PERCENT
~"~'...~"".,hl"'~,~ "~
BARRIER: LACK OF TIME
NO
YES
43
13
65.2%
40.6%
23
19
34.8%
59.4%
5.294; 1; 0.021
OTHER REASONS NEED FOREIGN
ACTIVITY
NO
YES
4
4
33.3%
80.0%
8
1
66.7%
20.0%
3.085; 1; 0.079
00
N
83
,
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t
tj
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Impact of Generic Fluid Milk and Cheese
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Advertising on Dairy Markets, 1984-98
99-05
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Kaiser, H.M. and C. Chung
State Markets
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Optimal Temporal Policies in Fluid Milk Advenising
Vande Kamp, P.R. and H.M.Kaiser
99-03
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Vande Kamp, P.R. and H.M. Kaiser
States
99-02
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Employee Compensation and Satisfaction on Dairy
($10 ea.)
Fogleman, S.L., R.A. Milligan, T.R.
Farms in the Northeast
Maloney and W.A. Knoblauch
Economics of Drip Irrigation for Juice Grape
Cuykendall, C.H., G.B. White, B.E.
Vineyards in New York State
Shaffer, A.N. Lakso and R.M. Dunst
Distribution of Gains from Research and Promotion
Chung, C. and H.M. Kaiser
in Multi-Stage Production Systems: Further Results
98-09
Structural and Marketing Changes in U.S. Retailing,
($25 ea.)
Weaver, R.V.
1987-1997, Foundation for the Future
.
98-08
98-07
Focus on People: Marketing and Performance
McLaughlin, EW., K. Park,
Benchmarks for the Fresh Pr<;>duce Industry
D.J. Perosio, G.M. Gr.een
Economics of Drip Irrigation for Apple Orchards in
White, G.B. and C. Cuykendall
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Dairy Farm Management Business Summary, New
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Knoblauch, W.A. and L.D. Putnam
York State, 1997
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Normative Estimates of Class I Prices Across U.S.
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Pratt, J.E, P.M. Bishop, EM. Erba,
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,
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Impact of National Generic Dairy Advertising on
Dairy Markets, 1984-97
Kaiser, H.M.
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